THE LAW AND ECONOMICS OF FLUCTUATING CRIMINAL TENDENCIES AND · Economic analyses of criminal law are frequently and heavily criticized for being unable to explain many criminal law

Electronic copy available at: http://ssrn.com/abstract=1987663

DRAFT – M. C. MUNGAN 5/27/2012 5:15 PM

1

THE LAW AND ECONOMICS OF FLUCTUATING CRIMINAL TENDENCIES AND

INCAPACITATION

MURAT C. MUNGAN†

ABSTRACT

Economic analyses of criminal law are frequently and heavily criticized

for being unable to explain many criminal law rules and doctrines that people

find intuitively just. Existing economic models cannot properly explain, for

instance, why criminal law distinguishes between (i) repeat offenders and first-

time offenders, (ii) murder and voluntary manslaughter, and (iii) remorseful

and non-remorseful offenders.

In this Article, I propose a new and richer economic theory of crime that

captures the rationales behind these practices, and potentially behind many

other important criminal law principles and doctrines. Unlike an

overwhelming majority of previous economic analyses, my theory accounts not

only for the deterrent effect of criminal punishment, but also for its

incapacitative effect. Moreover, and perhaps more importantly, it acknowledges

the fact that people have fluctuating, rather than constant, criminal tendencies.

That is, it recognizes that some people who ordinarily would rarely if ever

consider committing a wrongful act can, in rare circumstances, lapse into

committing a crime. Surprisingly, these two simple but critical concepts have

never been jointly considered in an economic analysis of crime even though

† Visiting Assistant Professor of Law, Florida State University College of Law; Ph.D., Boston

College, Department of Economics; J.D., George Mason University School of Law, M.A., Boston

College, Department of Economics. I thank Steven Shavell, Jonathan Klick, Richard McAdams,

Nuno Garoupa, Dan Markel, Mark Seidenfeld, Wayne Logan, Joshua Wright, Jim Rossi, Jay

Kesten, David Landau, David Orozco, Matteo Rizzolli, David Schleicher, Mary McCormick, Henry

Butler, Bruce Kobayashi, Tetyana Payosova, Franita Tolson, Shawn Bayern, Jake Linford,

Michele Boardman, Hannah Weisman, Webster Ye, and the participants in the 2012 Law and

Economics Colloquium at George Mason University School of Law for valuable comments and

suggestions, and Kristan Rivers for assistance in research and editing. I am indebted to Samuel

Wiseman for extremely valuable comments, suggestions and criticisms, and for devoting the time

and energy to improve the quality of this Article.



2

their inclusion appears to be an obvious extension of the standard crime and

deterrence model formalized almost half a century ago by Gary Becker.

The threat of imprisonment deters crime, but even when deterrence fails

and a crime is committed, imprisonment benefits society by preventing the

criminal from committing further wrongs outside prison for the duration of the

sentence. Because these incapacitative benefits exist only if the offender would

commit more crimes if left at large, the more strongly we believe that a criminal

is dangerous, the stronger the rationale for imprisonment. But since people

have fluctuating criminal tendencies, the mere fact that a person committed a

crime reveals imperfect information regarding his likelihood of recidivating. As

such, the offender’s criminal history and the circumstances surrounding the

crime reveal important pieces of information that can be used to update our

beliefs concerning the offender’s expected dangerousness –that is, to distinguish

those who have made an uncharacteristic mistake from the dangerous and

reckless criminals.

Capturing the interaction between the incapacitation function of

imprisonment and potential offenders’ fluctuating criminal tendencies allows

the model to supply specific, consequentialist justifications for repeat offender

laws, voluntary manslaughter laws, and the treatment of remorse in criminal

law. Going forward, this more nuanced approach will provide a clearer lens

through which to view other pervasive elements of criminal law, such as the

mens rea requirement, and to revisit the normative prescriptions of the previous

generation of economic analyses.



3

TABLE OF CONTENTS

ABSTRACT ................................................................................................................ 1

INTRODUCTION ........................................................................................................ 5

I. CRITICISMS DIRECTED AT ECONOMIC ANALYSES OF CRIMINAL LAW ............ 12

A. A Simple Crime and Deterrence Model: The Beckerian Framework ... 13

B. The Deterrability Assumption................................................................. 14

C. Common Knowledge Assumption ........................................................... 15

D. Problematic Implications ......................................................................... 16

II. DETERRENCE, INCAPACITATION AND REHABILITATION IN NORMATIVE

ECONOMIC ANALYSES OF CRIMINAL LAW.............................................................. 17

A. Rehabilitation is Ignored ......................................................................... 18

B. Incapacitation is Rarely Analyzed .......................................................... 19

C. Deterrence: The Predominant Economic Theory of Punishment .......... 21

D. Combining Incapacitation and Deterrence? ........................................... 22

III. IMPLICIT ASSUMPTION OF CONSTANT CRIMINAL TENDENCIES & FAILURES OF

LAW AND ECONOMICS AS A POSITIVE THEORY OF LAW ENFORCEMENT ............... 24

A. Constant Criminal Tendencies Assumption ........................................... 25

B. Divergences Between Normative Law and Economics and Actual Legal

Practices ............................................................................................................ 27

1. Punishment of Repeat Offenders ........................................................ 28

2. Remorse and Apologies ........................................................................ 30

3. Voluntary Manslaughter ..................................................................... 31

C. Constant Criminal Tendencies, and Their Role in the Divergences

between Normative Law and Economics and Actual Legal Practices .......... 32

IV. INTEGRATING FLUCTUATING CRIMINAL TENDENCIES INTO THE ECONOMIC

THEORY OF CRIME ................................................................................................ 33

A. Incorporating Fluctuating Tendencies ................................................... 33

B. Multiple Potential Offenders with Fluctuating Tendencies .................. 37

C. Insights from Behavioral Economics and Divergences between

Criminal Tendencies and Benefits .................................................................. 38


4

D. Law Abiding Citizens, Fluctuating Criminal Tendencies, and Non-

deterrable Crimes ............................................................................................ 41

V. ECONOMIC ANALYSIS WITH FLUCTUATING CRIMINAL TENDENCIES ............ 43

A. Punishing Repeat Offenders More Severely........................................... 44

B. Remorse and Apologies ............................................................................ 47

C. Voluntary Manslaughter ......................................................................... 49

D. The Role of Fluctuating Criminal Tendencies and Incapacitation ....... 52

VI. SUMMARY & CONCLUSION ............................................................................. 52


5

INTRODUCTION

Law and economics (L&E) has become one of the dominant approaches

to analyzing legal subjects,1 including criminal law2, but has also been one of

the most controversial –especially in criminal law.3 Paralleling and sometimes

1 See Francesco Parisi, Positive, Normative and Functional Schools in Law and Economics, 18

EUR. J. L & ECON. 259, 261 (2004) (“In many respects, the impact of law and economics has

exceeded its planned ambitions. One effect of the incorporation of economics into the study of law

was to irreversibly transform traditional legal methodology. Legal rules began to be studied as a

working system—a clear change from the Langdellian tradition, which had relied almost

exclusively on the self-contained framework of case analysis and classification, viewing law as

little more than a filing system. Economics provided the analytical rigor necessary for the study of

the vast body of legal rules present in a modern legal system. This intellectual revolution came at

an appropriate time, when legal academia was actively searching for a tool that permitted critical

appraisal of the law, rather than merely strengthening the dogmatic consistencies of the system”);

Joni Hersch & W. Kip Viscusi, Law and Economics as a Pillar of Legal Education 1 (Vanderbilt

University Law School Law and Economics Working Paper Number 11-35), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1907760 (discussing “the role of economists in

the faculty at major law schools, the influence of law and economics on legal scholarship, and the

substantive areas of economics that intersect with legal issues”); Ben Depoorter & Jef Demot, The Cross-Atlantic Law and Economics Divide: A Dissent, 2011 U. ILL. L. REV. 1593 (discussing the

success of law and economics as a discipline, and comparing its use in law schools in the United

States versus Europe). 2 The L&E approach has been applied to study crime and criminal law by lawyers as well as

economists, and this line of research continues to attract the attention of numerous scholars. See, e.g., the references cited in Nuno Garoupa, The Theory of Optimal Law Enforcement, 11 J. ECON.

SURVEYS 267 (1997) [hereinafter Garoupa, Optimal Law Enforcement]; A. Mitchell Polinsky &

Steven Shavell, The Economic Theory of Law Enforcement, 38 J. ECON. LITERATURE 45 (2000)

[hereinafter Polinsky & Shavell, Economic Theory of Law Enforcement]; A. Mitchell Polinsky &

Steven Shavell, Public Enforcement of Law, in 1 HANDBOOK OF LAW AND ECONOMICS 403-454 (A.

Mitchell Polinsky & Steven Shavell, eds. 2007) [hereinafter Polinsky & Shavell, Public Enforcement of Law]; Nuno Garoupa, CRIMINAL LAW AND ECONOMICS (2009). 3 See, e.g., Nuno Garoupa, Behavioral Economic Analysis of Crime: A Critical Review, 15 EUR. J.

L. & ECON 5 (2003) (“Within the law and economics controversy, the economic approach to crime

has been one of the most challenged subjects. The skepticism towards economic research on crime

and criminal law has been widely expressed by criminologists and sociologists.” citing Michael R.

Gottfredson & Travis Hirschi, A GENERAL THEORY OF CRIME (1990)); Jules L. Coleman, Crimes and Transactions, 88 CAL. L. REV. 921, 926 (2000) (“I am denying simply that the economist of law

can give anything resembling a plausible explanation of our criminal law.”); see also William L.

Barnes, Jr., Revenge on Utilitarianism: Renouncing a Comprehensive Economic Theory of Crime and Punishment, 74 IND. L. J. 627, 628 (1999) (debating the appropriateness of assumptions used

in L&E analyses of criminal law “I will then examine some additional assumptions made by law

and economics scholars: that behavior can be best explained by assuming that people weigh the

costs and benefits of any action and choose the action that provides the greatest utility (the

“rational actor” assumption); and that an economic analysis provides a complete explanation of

any field of law (the “universality” assumption). I will show that these assumptions are

particularly ill-suited to an analysis of criminal law, and that they, like the deterrence

assumption, detract from the usefulness of the economic theory.”); Paul H. Robinson & John M.

Darley, Does Criminal Law Deter? A Behavioral Science Investigation, 24 OXFORD J. LEG.

STUDIES 173 (2004) [hereinafter Robinson & Darley, Does Criminal Law Deter?], and Paul H.

Robinson & John M. Darley, The Role of Deterrence in the Formulation of Criminal Law Rules: At Its Worst When Doing Its Best, 91 GEO. L. J. 949 (2003) [hereinafter Robinson & Darley, The Role of Deterrence] (questioning the deterrent effect of specific rules in criminal justice systems,

potential offenders’ knowledge of legal rules, and potential offenders’ ability to use their

knowledge of legal rules to guide their decisions).


6

intersecting the ongoing scholarly exchange over consequentialist and

retributive theories of criminal punishment,4 there has long been heated

debate over the usefulness5 –and even legitimacy6— of economic analysis of

criminal law.

Pioneers of law and economics, including Richard Posner, Mitchell

Polinsky, and Steven Shavell rigorously applied the L&E methodology to

assess the desirability of various criminal laws and procedures.7 On the other

hand, prominent legal scholars, such as Jules Coleman and Claire Finkelstein

expressed enormous skepticism towards the L&E approach.8 Scholars in the

latter camp focused on the inability of the L&E approach to provide

explanations for a number of criminal law doctrines with popular and intuitive

appeal9 and concluded on that basis that L&E is ill suited for analyzing

criminal law.10

No single article is likely to resolve the larger philosophical differences

separating the two camps, but in this Article, I will demonstrate that this core

4 Retributivists frequently point out that consequentialism does not provide a principled account

for why innocent people should not be punished. See, e.g., Russel L. Cristopher, Deterring Retributivism: The Injustice of “Just” Punishment, 96 NW. U. L. REV. 843, 849 (2002)

(summarizing retributivist criticisms directed at consequentialist theories of punishment, and

“seek[ing] to turn back retributivism's principal criticisms of the consequentialist theory onto

itself”). The failure by consequentialism to justify adherence to this pervasive criminal law

principle was used by retributivists to question the normative appeal of utilitarian theories. See, e.g., Dan Markel, Retributive Justice and the Demands of Democratic Citizenship, 1 VA. J. CRIM.

L. 1, n.111 (forthcoming 2012). As briefly discussed in this Article, a similar method was used by

L&E critiques to question the normative appeal of economic analyses of criminal law. 5 See, e.g., Barnes, supra note 3, at 627-628 (discussing “the limits of the economic model as a

useful tool for enhancing our understanding of the criminal law”); Claire Finkelstein, The Inefficiency of Mens Rea, 88 CAL. L. REV. 895, 896 (2000) (“fundamental features of economic

analysis … make it ill-suited to explain the existence of the criminal law's mens rea

requirement”). 6 See, e.g., Coleman, supra note 3; Finkelstein, supra note 5. 7 See PIONEERS OF LAW AND ECONOMICS (Lloyd Cohen & Joshua D Wright eds. 2011) (reviewing

the academic contributions of pioneers of law and economics, including Posner, Polinsky and

Shavell). 8 See supra notes 3 and 5. 9 See, e.g., Finkelstein, supra note 5, at 896 (arguing that economics is incapable of explaining

“the existence of the criminal law's mens rea requirement”); see also Dan M. Kahan & Martha C.

Nussbaum, Two Conceptions of Emotions in Criminal Law, 96 COLUM. L. REV. 269 (1996)

(discussing the limits of the “narrow consequentialist” approach, one used frequently in normative

economic analyses, in providing an explanation for the treatment of voluntary manslaughter in

criminal law). 10 See, e.g., Finkelstein, supra note 5, at 898 (“If I am correct, both about the core of mens rea and

about the inability of economic analysis to explain it, the prospect of an economic analysis of the

notion of crime seems dim. For if a knowledge requirement cannot be explained in economic

terms, and if knowledge is as pervasive a requirement as I believe it to be, then economic analysis

would be unable to explain the basic structure of criminal wrongs.”); Barnes, supra note 5, at 627

(“Since Gary Becker’s seminal article, various scholars have either endeavored to resolve the

economic model’s inherent inconsistencies or have rejected the model entirely” (emphasis added)).


7

criticism, at least, is unwarranted. To do so, I develop a richer L&E theory11

that is capable of explaining the social benefits of numerous pervasive

criminal law rules and doctrines. Specifically, I construct an economic model of

criminal law that incorporates two simple facts: (i) one’s tendency to commit a

crime or crimes fluctuates over time,12 and (ii) imprisonment reduces crime

through its incapacitation effect.13 I illustrate that the interaction between

these two simple facts is so crucial that L&E models that ignore one or both

are incapable of capturing the usefulness of important phenomena in criminal

law. As such, it is the exclusion of these factors, and not any inherent

unsuitability of the approach, that is responsible for some of the criticized

failures of economic analyses of criminal law.

Surprisingly, these two facts have never been jointly accounted for in

existing normative L&E analyses of criminal law,14 since its inception by Gary

Becker in 1968.15 In fact, an overwhelming majority of previous analyses

11 This necessitates the elimination of simplifying assumptions in prior L&E analyses. It should be

noted, however, that using simplifying assumptions may provide many advantages, including

allowing tractability by isolating various issues. In fact, the success of the law and economics

approach is due, at least in part, to its ability to formulate discrete hypotheses by making

harmless and simplifying assumptions. 12 Professor Robert Cooter, to the best of my knowledge, is the first to formalize a similar point in

the law and economics literature. See Robert Cooter, Lapses, Conflict, and Akrasia in Torts and Crimes: Towards an Economic Theory of the Will, 11 INT’L REV. L. & ECON. 149 (1991)

(constructing a law and economics model where people occasionally lapse and commit crime). See also Eric A. Posner, Law and the Emotions, 89 GEO. LAW J. 1977 (2001) (building a framework

which assumes that people have “calm” preferences and “emotion state” preferences, which

implies that they have varying degrees of control over their actions at different points in time).

See infra section IV for a discussion of fluctuating criminal tendencies in further detail. 13 See Steven D. Levitt, Why Do Increased Arrest Rates Appear to Reduce Crime: Deterrence, Incapacitation, or Measurement Error?, 36 ECON. INQUIRY 353 (1998); Daniel P. Kessler & Steven

D. Levitt, Using Sentence Enhancements to Distinguish between Deterrence and Incapacitation,

17 J. L. & ECON. 343 (1999). See also Steven D. Levitt & Thomas J. Miles, Empirical Study of Criminal Punishment, in 1 HANDBOOK OF LAW AND ECONOMICS 455, 471-474 (A. Mitchell Polinsky

& Steven Shavell eds. 2007) (summarizing empirical studies distinguishing the deterrence and

incapacitation effects of imprisonment in reducing crime). 14 See infra section III for a review of trends in L&E analyses of criminal behavior. 15 See, e.g., Nuno Garoupa, The Economics of Organized Crime and Optimal Law Enforcement, 38

ECON. INQUIRY 278 (2000), (“The economic theory of crime has its starting point with Becker’s

[1968] seminal work” citing Gary S. Becker, Crime and Punishment: An Economic Approach, 76

J. POL. ECON. 169 (1968)). It should be noted, however, that as early as in the eighteenth century,

Montesquieu, Beccaria, and Bentham, without using tools from modern microeconomics, provided

insights that resemble the ideas presented by Becker and other L&E scholars. See C.-L.

Montesquieu, THE SPIRIT OF THE LAWS (1748); Cesare Beccaria, ON CRIMES AND PUNISHMENTS,

AND OTHER WRITINGS (1767); Jeremy Bentham, AN INTRODUCTION TO THE PRINCIPLES OF MORALS

AND LEGISLATION (1789). Some of Bentham’s ideas have striking similarities to those presented by

Becker. It appears, however, that Becker had no knowledge of Bentham’s ideas when he started

thinking about the economic analysis of crime. See Richard A. Posner, Bentham’s Influence on the Law and Economics Movement, 51 CURRENT LEGAL PROBLEMS 425, 432 (1998) (“I have it on good

authority-namely from Becker himself-that when he began thinking about the economics of crime,

he was unaware of Bentham's discussion of it”).


8

assume both that criminals have constant tendencies to commit crime16 and

that the only benefit of imprisonment is deterrence.17 But an analysis that

does not acknowledge fluctuating criminal tendencies overlooks the fact that

even calm and peaceful people may, even if rarely, lapse18 into committing

crimes. Moreover, a framework that ignores the incapacitation function of

imprisonment fails to recognize that, under the standard consequentialist

account, we punish not just to deter future misconduct, but also to segregate a

dangerous person from society, so that he can no longer act as a threat.19

Therefore, it is only natural for previous economic analyses of crime to fail to

capture the information exploiting features of various criminal law practices.

A rule or mechanism is capable of exploiting information, if it can, on

average, distinguish between individuals based on their likelihoods of

recidivating and punish them accordingly.20 Practices such as (i) punishing

16 See, e.g., Posner, supra note 12, at 1984 (“Economists usually assume that preferences remain

stable over the period of time relevant to analysis.”). See also Garoupa, Optimal Law Enforcement, supra note 2; Polinsky & Shavell, Economic Theory of Law Enforcement, supra note

2; Polinsky & Shavell, Public Enforcement of Law, supra note 2, for surveys of economic models of

law enforcement and criminal law where constant criminal tendencies are typically assumed.

Section III, infra discusses constant criminal tendencies in further detail. 17 There are a few normative L&E articles focusing on the incapacitation effect of punishment

without considering fluctuating criminal tendencies (see, e.g., Steven Shavell, A Model of Optimal Incapacitation, 77 AM. ECON. REV. 107 (1987); Thomas J. Miceli, A Model of Criminal Sanctions That Incorporate Both Deterrence and Incapacitation, 107 ECON. LETTERS 205 (2010) [hereinafter

Miceli, Deterrence and Incapacitation]; Thomas J. Miceli, Deterred or Detained? A Unified Model of Criminal Punishment (University of Connecticut Department of Economics Working Paper

2009-16), available at http://www.econ.uconn.edu/working/2009-16.pdf [hereinafter Miceli,

Deterred or Detained?]; Thomas J. Miceli, Deterrence and Incapacitation Models of Criminal Punishment: Can the Twain Meet? (University of Connecticut Department of Economics Working

Paper 2009-25), available at http://www.econ.uconn.edu/working/2009-25.pdf [hereinafter Miceli,

Can the Twain Meet?]), as well as articles considering variants of fluctuating criminal tendencies

without considering incapacitation (see, e.g., Cooter, supra note 12). 18 See supra note 12. 19 See Shavell, supra note 17, (constructing an economic model of incapacitation where social

benefits from imprisonment increase with the dangerousness of the offender). This argument has

a caveat that was pointed out by Isaac Ehrlich: criminals can continue to commit wrongful acts in

prison. See Isaac Ehrlich, On the Usefulness of Controlling Individuals: An Economic Analysis of Rehabilitation Incapacitation and Deterrence, 71 AM. ECON. REV. 307 (1981). 20 There is a related literature on selective incapacitation, which focuses on the possibility of

“discriminating among offenders on the basis of predicted risk by using” proxies for offenders’

dangerousness that differ from those being used in the criminal justice system. See Peter W.

Greenwood, U.S. DEPT OF JUSTICE, SELECTIVE INCAPACITATION (1982), at xx. My objective is not to

suggest the use of such proxies, but to focus on existing practices in criminal law, and to show that

L&E can explain their social desirability. It should also be noted that information exploiting

features of repeat offender laws have attracted the interest of non-economists. Although I am

unaware of normative L&E analyses of optimal law enforcement focusing on the information

exploiting features of these laws, there are articles which provide simple simulations, some of

which make the descriptive point that short prison terms can be sufficient to incapacitate

dangerous offenders. See, e.g., Linda S. Beres & Thomas D. Griffith, Do Three Strike Laws Make Sense? Habitual Offender Statutes and Criminal Incapacitation, 87 GEO. L. J. 103 (1998) and the

references cited therein.


9

repeat offenders more severely,21 (ii) punishing remorseful offenders less

severely,22 and (iii) punishing voluntary manslaughter less severely than

murder23 can be viewed as information exploiting mechanisms. Previous L&E

models cannot provide satisfying rationales for these practices, because they

overlook their information exploiting features.24

To address this shortcoming, I argue for modifying the standard

economic model of crime and deterrence in two ways: (i) replacing the

assumption of constant criminal tendencies with the assumption of fluctuating

criminal tendencies, and (ii) accounting for the fact that imprisonment lowers

crime by segregating criminals from the rest of the society.

To explain the first proposed modification, consider the standard L&E

model of crime in which people have constant criminal tendencies. That is, the

standard model unrealistically assumes that a person’s illicit benefit from

21 See, e.g., FEDERAL SENTENCING GUIDELINES MANUAL § 5A (2011). See also A. Mitchell Polinsky

and Steven Shavell, On Offense History and the Theory of Deterrence, 18 INT’L REV. L. & ECON.

305 (1998) (“In practice, the law often sanctions repeat offenders more severely than first-time

offenders.” The authors also provide a number of examples for laws requiring harsher penalties

for repeat offenders). 22 See infra subsection III.B.2.. 23 See, e.g., MODEL PENAL CODE § 210.3. See also Posner, supra note 12 (briefly discussing

conditions under which heat of passion killings were excused in Roman Law); Kahan &

Nussbaum, supra note 9, (discussing the conditions under which murder is reduced to voluntary

manslaughter in common law, and existing scholarship attempting to provide rationales for such

reduction). 24 Existing L&E analyses of repeat offender laws provide mixed provide mixed and qualified

results, ranging from less severe, to equal or more severe punishments for repeat offenders (see, e.g., Murat C. Mungan, Repeat Offenders: If They Learn We Punish Them More Severely, 30 INT’L

REV. L. & ECON. 173 (2010) [hereinafter Mungan, Repeat Offenders] (deriving optimal sanction

schemes for repeat offenders when they can learn how to escape detection through their past

experiences with the criminal justice system, and suggesting that repeat offenders ought to be

punished more severely than first time offenders, only if such learning effects are significant);

Polinsky & Shavell, Public Enforcement of Law, supra note 2, at 438 (demonstrating that uniform

sanctions are optimal when adequate deterrence can be achieved, and observing that “only if

deterrence is inadequate is it possibly desirable to condition sanctions on offense history”);

Winand Emons, A Note on the Optimal Punishment for Repeat Offenders, 23 INT’L REV. L. &

ECON. 253 (2003) (concluding that “[t]he optimal sanction scheme is decreasing rather than

increasing in the number of offenses” when “agents may follow history-dependent strategies” and

a few other conditions are met.); Polinsky and Shavell, supra note 21 (deriving optimal sanction

schemes for repeat offenders and concluding that it is optimal to punish repeat offenders and

young first time offenders with the same sanction, and punishing old first time offenders less

severely than the former two). Subsection III.B.1. infra provides a more detailed discussion of the

discrepancies between implications of economic analyses of criminal law, and existing laws

concerning the punishment of repeat offenders). Similarly, consequentialist analyses generally

suggest that remorse ought to be irrelevant in the determination of sanctions (see, e.g., Bryan H.

Ward, Sentencing Without Remorse, 38 LOYOLA U. CHI. L. J. 131, 132 (2006); Murat C. Mungan,

Don’t Say You’re Sorry Unless you Mean It: Pricing Apologies to Achieve Credibility, 32 INT’L REV.

L. & ECON 178 (2012) [hereinafter Mungan, Apologies]. To the best of my knowledge, there is no

economic model of law enforcement suggesting that voluntary manslaughter ought to be punished

less severely than murder.


10

committing a given act is constant over time and he has perfect self-control.25

As such, the model assumes that people consistently make the same choices

over illegal and legal options. They do not, for instance, park legally today and

park illegally tomorrow, unless the expected fine for illegal parking changes

over time. Fortunately, as I demonstrate in section IV, existing tools in

economics can be used to replace this false assumption with a more realistic

one: fluctuating criminal tendencies. This new assumption embodies the

common belief that, as one court observed, crimes may occur “from the

infirmity of passion to which even good men are subject.”26

The explanation of the second proposed modification requires a brief

description of trends in economic analyses of criminal law. An overwhelming

majority of economic analyses of criminal law focus on deterrence, and ignore

other potential justifications for punishment, including incapacitation.

Needless to say, the incapacitation function of punishment contributes to

reductions in crime rates.27 However, such incapacitation benefits are largely

ignored in normative economic analyses of criminal law, because their

inclusion has not been seen to dramatically alter the implications of standard

crime and deterrence models.28 But, as I demonstrate, a richer economic model

incorporating fluctuating criminal tendencies provides simple and powerful

rationales for existing practices, which the standard model could not explain.

A repeat offender’s criminal record reveals that it is unlikely that he is a

person, who, under unusual circumstances, failed to exert control over

temptations to commit a crime. Instead, it is much more probable that he is a

person who has a high tendency to commit crime. Therefore, if not imprisoned,

he is more likely than a first time offender to commit subsequent crimes. As

such, due to the high benefits from incapacitation, penalty enhancements for

repeat offenders are justified. Similarly, a truly remorseful offender is less

likely to commit his previous wrongs under similar conditions in the future.

Therefore, he is unlikely to recidivate, and incapacitation benefits from

imprisonment are minimal. Accordingly, it is desirable to punish truly

remorseful offenders less severely.29 Finally, a person who commits a crime in

25 See supra note 16. 26 State v. Cook, 1859 WL 4467, at *144 (Ohio Com. Pl. 1859) rev'd, 1859 WL 4465 (Ohio Dist.

1859) (emphasis added). 27 See supra note 13. 28 See, e.g., Shavell, supra note 17; Miceli, Deterrence and Incapacitation, supra note 17; Miceli,

Deterred or Detained?, supra note 17. Section III infra discusses this point in further detail. 29 One may naturally question whether courts can distinguish truly remorseful offenders from

offenders who ‘fake remorse’. It is plausible to assume that perfectly separating remorseful and

non-remorseful offenders is impossible. This is the primary reason as to why the deterrence based

economic analysis, in which there is no direct social benefit to punishing truly remorseful

offenders less severely, suggests that sentence reductions for successfully asserting remorse are

generally sub-optimal. See, e.g., Mungan, Apologies, note 24, supra. If, however, as argued in


11

the heat of passion is likely to have committed the crime due to extreme

emotional stimuli. If so, the mere fact that he committed the crime reveals

relatively little information about his dangerousness absent those stimuli.

Expected incapacitation benefits from punishing him are small compared to

similar benefits from punishing a criminal who committed an illegal act

without provocation. As such, reduced penalties for voluntary manslaughter

are justified.

All explanations provided above rely on similar rationales.30 Once

fluctuating criminal tendencies are incorporated, the mere fact that a person

committed a crime reveals imperfect information about his dangerousness. As

such, circumstances surrounding the crime reveal important pieces of

information that can be used to update our beliefs concerning offenders’

dangerousness. Since expected incapacitative benefits are greater for more

dangerous offenders, the more strongly we believe—based on the

circumstances surrounding the crime—that the criminal is dangerous, the

longer an L&E approach suggests that he should be imprisoned. We should be

more skeptical, in turn, of harsh sentences for individuals who demonstrate a

low propensity for crime.

Beyond offering an efficiency rationale for these existing practices,

correcting the standard model has significant descriptive and normative

implications for the economic theory of criminal law. Although determining

the extent to which accounting for the information exploiting features of

criminal law leads to results different from those obtained under the standard

model will be the subject of future work, I will make two preliminary

observations here.

First, existing economic models of crime and deterrence frequently

have been used to advocate the necessity of harsh criminal justice policies.31

As briefly discussed above and explained in further detail in the proceeding

sections, a richer economic model of crime, as presented in this Article,

suggests that first time offenders ought to be treated leniently, and that

remorseful individuals and criminals acting in the heat of passion ought to be

section V, infra, there are benefits to punishing truly remorseful offenders less severely, a trade-

off emerges between obtaining such benefits and costs due to non-separability problems. This

suggests that sentence reductions for those who convincingly display remorse is justified in a

broader range of conditions. Section, V.B., infra, discusses remorse and apologies in further detail. 30 These rationales rely on what can formally be called Bayesian updating, which is described

more formally and in further detail in note 170 infra. 31 See John J. Donohue III, Economic Models of Crime and Punishment, 74 SOC. RES. 379 (2007)

(explaining how Gary Becker’s 1968 article, supra note 15, “started to powerfully influence

criminal justice policy in the 1970s and provided the intellectual support for … the increasing

harshness of the American criminal justice system over the last 30 years.”).


12

punished less severely. As such, this Article suggests that harsh penalties

should be reserved for individuals who have, through their actions,

demonstrated that they are likely to recidivate.

Second, it has been previously suggested that “fundamental features of

economic analysis … make it ill-suited to explain the existence of the criminal

law's mens rea requirement.”32 I believe the economic theory of criminal law I

propose in this Article is capable of proving this claim wrong. The mens rea

requirement in criminal law can be conceptualized as an information-

exploiting device: a criminal’s mental state while committing a harmful act

provides information about his likelihood of recidivating. As such, the

rationales identified in this Article suggest that criminals should be punished,

ceteris paribus, in proportion to the intentionality of their acts. However,

developing a complete model to conceptualize mens rea as an information-

exploiting device is a task that I cannot undertake in this Article due to the

immenseness of the subject.

This Article proceeds as follows. Section I provides a summary of the

relevant criticisms directed at economic analyses of crime and punishment.

Section II briefly explains how economic analyses of crime and punishment

have focused on deterrence and have largely ignored other potential

consequentialist justifications for punishment, such as rehabilitation and

incapacitation. In section III, I explain how economic models assume constant

criminal benefits. Section IV clarifies how fluctuating criminal tendencies can

be incorporated in economic analyses of crime. Finally, in section V, I describe

how a rich model incorporating fluctuating criminal benefits and

incapacitation benefits of imprisonment provides rationales for existing

criminal law doctrines and practices. Section VI concludes.

I. CRITICISMS DIRECTED AT ECONOMIC ANALYSES OF CRIMINAL LAW

Despite providing useful analytical tools to evaluate the desirability of

numerous rules and standards,33 L&E is frequently criticized on various

grounds. In particular, economic analyses of criminal law are criticized for

making use of unrealistic assumptions and having limited explanatory

power.34 Before specifying these criticisms, it will be useful to summarize the

32 See Finkelstein, supra note 5, at 896. 33 See supra note 1. 34 See notes 3, 5 and 9, supra.


13

simple Beckerian framework,35 which many law and economics scholars use to

analyze issues related to criminal law and procedure.36

A. A Simple Crime and Deterrence Model: The Beckerian Framework

In 1968, Gary Becker provided a framework to analyze criminal

decision making by using modern economics.37 After his great contribution,

many scholars started analyzing various issues in criminal law by adopting

his framework.38 In the simplest form of the Beckerian model, a fraction of

society consists of potential offenders, and a potential offender is a person who

benefits from the commission of a crime, and dislikes being punished.39

Offenders are assumed to know the probability (p) with which they will be

caught if they commit a crime and the sanction (s) that they will be subject to

if caught.

In this framework, a potential offender is assumed to commit a crime,

only if the benefit from the crime (b) exceeds the expected sanction (p x s).40

Because it is assumed that potential offenders differ from each other in their

criminal benefits, it follows that only offenders with b > (p x s) commit crime.41

This model is then used to evaluate various law enforcement mechanisms, and

to derive optimal policies.42

35 A variant of this framework was presented by Bentham in 1789. But Becker provided first

formal model by using modern economic tools. See supra note 15. 36 See Becker, supra note 15. See also Garoupa, Optimal Law Enforcement; Polinsky & Shavell,

Economic Theory of Law Enforcement; Polinsky & Shavell, Public Enforcement of Law, supra note

2; (surveying economic models of law enforcement developed subsequent to Becker’s article). 37 Becker, note 15 supra. For another brief review of Becker’s model, see Donohue, supra note 31. 38 See, Garoupa, Optimal Law Enforcement, supra note 2; Polinsky & Shavell, Economic Theory of Law Enforcement, supra note 2; Polinsky & Shavell, Public Enforcement of Law, supra note 2

(surveying economic models of law enforcement developed subsequent to Becker’s article). 39 One may question whether under this definition everyone in society is classified as a potential

offender. This does not follow, because, as explained in the proceeding portion of this section,

benefits include non-monetary considerations, and therefore not all individuals benefit from the

commission of a crime. I elaborate further on this and related points in sections III and IV infra. 40 This is true in the simplest form of Beckerian models. In more sophisticated models

incorporating criminals risk preferences, criminals are assumed to make decisions by comparing

expected utilities rather than expected values. See, e.g., Donohue, supra note 31, for an

informative discussion on criminals risk preferences and how risk preferences may appear in

Beckerian models. See also Jeffrey Grogger, Certainty vs. Severity of Punishment, 29 ECON.

INQUIRY 297 (1991); Michael K. Block & Vernon E. Gerety, Some Experimental Evidence on Differences Between Student and Prisoner Reactions to Monetary Penalties and Risk, 24 J. LEG.

STUDIES 123 (1995) (empirically studying criminals risk preferences). For purposes of

demonstrating what constant benefits mean, it is sufficient to focus on simpler models. 41 An earlier version of this statement dates back to 1789. See Posner, supra note 15, at 431

(“Bentham had made a number of important economic points in the Introduction: a person

commits a crime only if the pleasure he anticipates from the crime exceeds the anticipated pain”

(emphasis original) referring to Bentham, supra note 15.) 42 See, e.g., Polinsky & Shavell, Public Enforcement of Law, supra note 2 (reviewing a number of

articles using this approach).


14

It should be noted that Beckerian models do not rule out the

possibility that potential offenders, when making decisions, may take into

account moral or sociological considerations. The variable b is interpreted as

incorporating all considerations related to the commission of a crime; a

potential offender’s benefit is not limited to monetary or pecuniary gains.

Implicit in the Beckerian framework is the idea that people, even

criminals, respond to incentives. A potential criminal compares the benefits to

expected losses, and decides whether or not to commit a crime. Although this

idea sounds intuitive —and is trivially true to many economists43— it is the

basis for many criticisms aimed at economic analyses of crime.

B. The Deterrability Assumption

Simple Beckerian models imagine a world where every individual can

be deterred from committing crime. This can potentially be achieved through

the threat of punishment. Using the previously introduced notation, for any

individual who has a benefit of b from crime there generally is an expected

sanction (p x s) exceeding his benefit, and therefore capable of deterring him.44

This feature of simple Beckerian models is the focal point of many

criticisms.45 Many scholars make the observation that it may be impossible to

deter a particular individual from committing crime under many

circumstances. A person, who is intoxicated or finds his wife in bed with a

stranger, may not consider the expected punishment associated with

committing a crime even if fully aware of the severity and certainty of

punishment.46

43 Many economists interpret this as a simple application of the “revealed preference” concept. See

Hal R. Varian, Revealed Preference, in SAMUELSONIAN ECONOMICS AND THE TWENTY-FIRST

CENTURY 99-115 (Michael Szenberg, Lall Ramrattan, & Aron A. Gottesman eds. 2006), (providing

a survey of revealed preference analysis and explaining the concept in detail). 44 In the rare case where a potential offender does not value his life much, it may be impossible to

deter him through punishment. Ignoring the possibility of torture, let s be the upper bound for

punishment (e.g. the death penalty). In this case, it is impossible to deter an individual for whom

b>ps. But, even in those rare cases, deterrence can theoretically, although impracticably, be

achieved by offering the potential offender something of greater value than what he has to gain

through crime, on the condition that he abstains from committing crime. 45 See notes 3, 5, 9, and 10, supra, and accompanying text. 46 See Robinson & Darley, Does Criminal Law Deter?, supra note 3, at 178-182 (discussing what

they call “The Rational Choice Hurdle” and arguing that “[b]ehavioural scientists who study the

decision-making patterns of people now realize that being able to demonstrate that a person has

some knowledge of various facts that could be relevant to a decision does not mean that those

facts are recalled, and mobilized appropriately, by the decision-maker.”). See also Posner, supra

note 12, at 1993-1994 (claiming that people, who are experiencing intense anger, cannot be

deterred). But see, e.g., Miceli, Deterred or Detained?, supra note 17, (“Central to [Beckerian

Models], and crucial for deterrence to be possible, is the rational offender assumption, which

maintains that would-be criminals decide whether or not to commit a crime by comparing the


15

The idea that people often do not consider costs when making

decisions, or heavily discount them, is also supported by recent research in

behavioral law and economics. This line of research points out that many

people suffer from what is called bounded willpower, and that they face

difficulties in delaying gratification, even when they know that doing so will

serve their long-term self-interest.47 As such, insights from behavioral law and

economics support the claim that the basic assumption that people are

deterrable is not globally applicable.

C. Common Knowledge Assumption

Another assumption that is commonly invoked in simple Beckerian

models is that potential criminals have perfect knowledge about the expected

punishment associated with various crimes.48 Using the previous notation,49 a

potential criminal is assumed to know the certainty (p) and severity of

punishment (s). But, is this really true?

Many scholars argue that potential criminals may not be very

responsive to increases in the certainty and severity of punishment. According

to a study conducted by economics Professor David A. Anderson, “76% of active

criminals and 89% of the most violent criminals either perceive no risk of

apprehension or are incognizant of the likely punishments for their crimes.”50

Anderson’s study is cited for the proposition that criminals are not as informed

about criminal law as is commonly assumed.51

gains from the illegal act to the expected punishment. Although some may doubt the validity of

this assumption, there is ample empirical evidence to support it.” citing Levitt and Miles, supra

note 13). 47 Subsection IV.C., infra, discusses bounded willpower, and other issues analyzed in behavioral

law and economics in further detail. 48 See, Robinson & Darley, Does Criminal Law Deter?, supra note 3, at 175-178 (discussing what

they call “The Legal Knowledge Hurdle” and stating: “To sum up, people rarely know the criminal

law rules, even when those rules are formulated under the express assumption that they will

influence conduct.”). It should be noted that there are, even if very few, economic analyses of law

enforcement incorporating the fact that not all individuals are informed of legal rules and

procedures. See, e.g., Louis Kaplow, Optimal Deterrence, Uninformed Individuals, and Acquiring Information about Whether Acts Are Subject to Sanctions, 6 J. L. ECON. & ORG. 93 (1990); Murat

C. Mungan, Optimal Warning Strategies: Punishment Ought not to be Inflicted where the Penal Provision is not Properly Conveyed (FSU College of Law, Public Law Research Paper no. 505)

available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1803275. 49 See supra subsection I.A.. 50 See David A. Anderson, The Deterrence Hypothesis and Picking Pockets at the Pickpocket’s Hanging, 4 AM. L. & ECON. REV. 295 (2002). See also Richard H. McAdams & Thomas Ulen,

Behavioral Criminal Law and Economics, in CRIMINAL LAW AND ECONOMICS (Nuno Garoupa ed.

2009), at 414-415 (briefly reviewing other empirical studies that suggest the common knowledge

assumption does not globally hold). But see, e.g., Miceli, Deterred or Detained?, supra note 17, at

1 (claiming that “there is ample empirical evidence to support” the assumption that offenders act

rationally). 51 See Robinson & Darley, Does Criminal Law Deter?, supra note 3, at 176.


16

Furthermore, new insights from behavioral law and economics studies

suggest that people may possess cognitive biases, such as optimism and

overconfidence, which prevent them from objectively assessing the probability

with which they can experience negative events.52 These studies cast further

doubt on the validity of the common knowledge assumption, which is

frequently invoked in economic analyses of law enforcement.

D. Problematic Implications

In short, many normative economic analyses of criminal law invoke

assumptions concerning the deterrent effect of punishment schemes that are

not applicable in all situations. This naturally raises questions as to whether

normative implications of analyses invoking false assumptions can be taken

seriously.53 Because most economic analyses of crime rely on a deterrence

based theory of punishment,54 their explanatory power will naturally be

limited if their assumptions concerning the deterrent role of punishment are

false.

Perhaps this is the reason why there are numerous tensions between

the implications of simple economic analyses of crime and existing practices in

criminal law. In particular, as is explained in section III, infra, economic

analyses are unable to provide satisfying rationales as to (i) why repeat

offenders are punished more severely than first time offenders, (ii) why there

is a de facto tendency to punish offenders who appear to be remorseful less

severely, and (iii) why voluntary manslaughter is punished less severely than

murder.

Do these observations imply that economic analyses of criminal law

can never be useful? Not necessarily. First, it should be noted that if

assumptions concerning the deterrent effect of punishment schemes often,

even if not always, hold, then such assumptions are not very harmful. Second,

even assuming, in arguendo, that most criminals do not react to incentives,

economic analyses can provide useful insights by focusing on non-deterrence

based consequentialist theories of punishment, such as incapacitation. Third,

economic analyses of criminal law can incorporate the fact that not all

52 Subsection IV.C., infra, and the notes therein, discuss cognitive biases, such as over-confidence

and optimism, and list a number of relevant articles analyzing related behavioral issues. 53 See, e.g., Robinson & Darley, The Role of Deterrence, supra note 3, at 952 (“Formulating

criminal law rules according to a deterrence analysis can produce erroneous results if based upon

missing or unreliable data.”) 54 See infra section II where I summarize how economic theories of law enforcement focus mainly

on deterrence.


17

individuals can be deterred through threats of punishment.55 In fact, as I

demonstrate in section V, an economic analysis of criminal law which focuses

on the second and third points provides satisfying rationales for some of the

legal practices which most people find intuitive and fair.

Before proceeding, however, it is useful to provide a brief summary of

economic theories based on deterrence versus other theories of punishment.

This brief review serves several important functions. First, it reveals the lack

of interest shown to non-deterrence theories. Second, it allows the

identification of different types of social benefits through deterrence versus

incapacitation. Deterrence lowers present crime rates by making crime a

costly option for potential offenders. Incapacitation, on the other hand, lowers

future crime rates by making it impossible for criminals to commit subsequent

crimes while imprisoned. Third, it hints at how the explanatory power of

economic analyses of crime can be increased by jointly focusing on the

incapacitative and deterrent effects of punishment. An exclusively deterrence

based theory cannot provide justifications for imprisoning dangerous and

undeterrable individuals due to trivial reasons. On the other hand, an

exclusively incapacitation based theory cannot provide satisfying rationales as

to why minor offenses receive monetary fines, rather than imprisonment, as

sanctions. This follows from the simple fact that monetary fines do not have

an incapacitative function.

II. DETERRENCE, INCAPACITATION AND REHABILITATION IN NORMATIVE

ECONOMIC ANALYSES OF CRIMINAL LAW

It is only natural for economic analyses of crime to focus on some or all

of the three main consequentialist justifications for punishment: deterrence,

rehabilitation and incapacitation.56 But, as discussed below, economic theories

of crime and law enforcement focus predominantly on deterrence,57 and pay

very little attention to rehabilitation and incapacitation.

55 See, e.g., Kaplow, supra note 48, (formally incorporating into economic analyses of law

enforcement the fact that some individuals may be uninformed of legal rules and procedures). 56 See, e.g., Ehrlich, supra note 19, at 311 (considering the usefulness of imprisonment and

observing that “[t]he three basic measures of crime control most frequently discussed in the

criminological literature are deterrence, incapacitation, and rehabilitation”). 57 See Barnes, supra note 3, at 628 (suggesting that law and economics scholars “bas[e] their

analyses primarily on only a small part of the traditional framework—deterrence”); Thomas J.

Miceli, Can the Twain Meet?, supra note 17, at 1 (“Economic models of law enforcement beginning

with Becker (1968) have primarily focused on the role of criminal punishment in deterring crime.”

(citing Becker, supra note 15)); Polinsky & Shavell, Public Enforcement of Law, supra note 2, at

444 (“Economists have paid much less attention to incapacitation than to deterrence, despite the


18

In this Article, I focus on the incapacitation and deterrence functions

of punishment. I refrain from commenting on potential rehabilitative effects,

primarily because “[i]ncarceration rarely is imposed today for rehabilitative

(reform) purposes.”58 Unsurprisingly, normative economic analyses take a

similar approach, and do not focus on the rehabilitative effects of punishment.

There are a variety of historical, methodological, and theoretical reasons for

this, which are briefly presented before proceeding to lengthier reviews of L&E

analyses focusing on incapacitation and deterrence.

A. Rehabilitation is Ignored

Among the three potential consequentialist justifications for

punishment, rehabilitation receives the least attention. This is perhaps due to

trends and developments in the 1970’s, which led to the “thrashing of

rehabilitation.”59 Moreover, economists may be ignoring rehabilitation due to

its “counterdeterrent” effects identified by Isaac Ehrlich in his 1981 article:

“the rehabilitation benefits provided to actual offenders ex post produce a

counterdeterrent effect on potential offenders ex ante. … The reason is that

successful rehabilitation confers an implicit subsidy on potential offenders by

offering training and employment benefits at public expense.”60 A third factor,

which may have contributed to the neglect of rehabilitation by economists,

significance of the incapacitation rationale in criminal law enforcement.”). It is also remarkable

that Polinsky & Shavell, Public Enforcement of Law, supra note 2, which is an extensive review of

economic theories of public enforcement of law, does not even once refer to the word

‘rehabilitation’ except when citing Ehrlich, supra note 19, which contains the word ‘rehabilitation’

in its title. This reflects the fact that economists have largely ignored rehabilitation in their

analyses, perhaps due to reasons discussed in the proceeding paragraphs. 58 Joshua Dressler, CASES AND MATERIALS ON CRIMINAL LAW (4th ed.), at 36. 59 Alfred Blumstein, Interaction of Criminological Research and Public Policy, 12 J. QUANTITATIVE

CRIMINOLOGY 349, 351 (1997). See also Francis T. Cullen & Paul Gendreau, Assessing Correctional Rehabilitation: Policy, Practice, and Prospects, 3 CRIM. JUST. 2000 109, 112 (2000)

(summarizing the events in the 1970’s that led to “the abandonment of, or loss of faith in,

rehabilitation as a goal of corrections” and questioning whether such abandonment “was

deserved”); Robert Martinson, What Works? –Questions and Answers about Prison Reform, 35

PUB. INT. 22, 25 (1974) (providing a skeptical view of rehabilitative approaches, and stating that

“with few and isolated exceptions, the rehabilitative efforts that have been reported so far have

had no appreciable effect on recidivism”); Ehrlich, supra note 19, at 314 (“Numerous studies

indicate little success, if not outright failure, of most programs in bringing about any enduring

rehabilitative outcomes for treated offenders.”) 60 Ehrlich, supra note 19, at 315, (emphasis original). More specifically, Ehrlich argues as follows:

“[t]he effect of rehabilitation on the equilibrium frequency of offenses is even more complex. The

reason is that successful rehabilitation confers an implicit subsidy on potential offenders by

offering training and employment benefits at public expense. Even if the rehabilitation programs

were not carried out at the expense of the criminal sanctions, but rather in addition to them, the

provision of rehabilitative net benefits --to the extent that they are positive- necessarily enhances

the anticipated net return from crime to the potential offender … by the magnitude of the

rehabilitation subsidy per offense….”


19

may have to do with the problems it poses for social choice theory.61 Social

choice theory identifies ways to aggregate individuals’ preferences to rank the

social desirability of various options. As such, it provides the tools for

normative evaluations of rules and laws. Rehabilitation, by definition, involves

externally incited changes to a person’s preferences. This is problematic,

because it is common in social choice theory to consider members of society as

having fixed preferences.62

B. Incapacitation is Rarely Analyzed

Normative L&E analyses of law enforcement incorporating

incapacitation as a justification for punishment are rare. There is only one

pre-2010 article by Professor Steven Shavell,63 and three very recent articles

by Professor Thomas Miceli,64 specifically focusing on incapacitation by using

the standard normative L&E approach. Shavell’s article analyzes optimal

punishment schemes when incapacitation is the only function of punishment,

and Miceli’s articles extend the analysis to cases where punishment has

deterrent as well as incapacitation effects. To investigate why incapacitation

may have been ignored in normative economic analyses, I first review

Shavell’s 1987 article. Miceli’s articles are briefly reviewed in sub-section

II.D., infra, where I discuss the effect of combining deterrence and

incapacitation in L&E models.

Steven Shavell conducted the single pre-2010 economic analysis of

optimal law enforcement, which incorporated incapacitation as a potential

justification for punishment, in 1987.65 His article suggests that an offender

61 See MICROECONOMIC THEORY (Andreu Mas-Colell, Michael D. Whinston, & Jerry R. Green eds

1995), at 787 (“The central question of [social choice] theory concerns the possibility of deriving

the objectives of the policy maker as an aggregation of the preferences of agents in the economy,

and of doing so in a manner that could be deemed as satisfactory according to a number of

desiderata.”) 62 In social choice theory, it is common to assume that members of society have “well defined

preferences”, which are not manipulated through social policies, such as rehabilitation, and

therefore remain constant throughout analyses. Id., at 789. 63 Shavell, supra note 17, is the single pre-2010 economic study focusing specifically on

incapacitation that I am aware of. I am excluding Ehrlich, supra note 19, which also contains a

brief discussion of incapacitation, but does not provide a complete theory as in Shavell’s 1987

article. Miceli, Can the Twain Meet?, supra note 17, and Polinsky & Shavell, Public Enforcement of Law, supra note 2, briefly review existing economic analyses of optimal law enforcement

incorporating incapacitation as a potential justification for punishment, and only cite Shavell’s

1987 article. There are, however, numerous articles considering optimal non-monetary fines, such

as imprisonment, and justifying their use to achieve deterrence –especially when the judgment

proof offender problem (see Shavell, infra note 92) is a significant concern—. See, e.g., the

references cited in note 70 infra. 64 See Miceli, Deterrence and Incapacitation, supra note 17; Miceli, Deterred or Detained?, supra

note 17; Miceli, Can the Twain Meet?, supra note 17. 65 For another brief review of Shavell, supra note 17, see Polinsky & Shavell, Public Enforcement of Law, supra note 2.


20

ought to be imprisoned, if and only if, his potential to cause harm –per unit of

time free– exceeds the cost –per unit of time– of imprisonment. If an offender’s

dangerousness is constant, he should either be imprisoned for life or not

imprisoned at all. This result is in sharp contrast with existing punishment

schemes, where offenders are generally punished with intermediate sentences.

However, if an offender’s dangerousness declines with age,66 it is optimal to

release the offender after his dangerousness falls below a critical level.

Although Shavell’s model of incapacitation, when combined with the

rehabilitative effects of ageing, produces some sensible results,67 it appears to

be incapable of producing results of similar quality and quantity to the

standard deterrence model, which was “brought to its current level of maturity

by” the same author and Mitchell Polinsky. 68

Consider the use of monetary fines, rather than imprisonment, for

minor offenses. 69 Deterrence based theories provide satisfying rationales as to

why imprisonment should be reserved for major offenses. The harm inflicted

through a minor offense is, by definition, relatively low. As such, it does not

pay-off to use an expensive method of deterrence, namely imprisonment, to

deter the infliction of such harm. A degree of deterrence can be achieved by

resorting to the exclusive use of monetary fines. However, more serious crimes

necessitate the use of imprisonment or other non-monetary fines to increase

deterrence. It simply “pays-off” to incur the expense of costly sanctions, such

as imprisonment, to marginally reduce social harms inflicted through more

serious crimes.

Theories focusing only on incapacitation do not, and cannot, provide

satisfying rationales for the exclusive use of monetary sanctions. This follows

66 See, e.g., Levitt & Miles, supra note 13, at 460 (citing CAREER CRIMINALS AND CRIMINAL

CAREERS (Alfred Blumstein, Jacqueline Cohen, Jeffrey A. Roth, & Christy A. Visher eds. 1986));

Polinsky & Shavell, Public Enforcement of Law, supra note 2, at 443 (citing James Q. Wilson &

Richard J. Herrnstein, CRIME AND HUMAN NATURE (1985)) (providing support for this

assumption). 67 Levitt & Miles, supra note 13, at 460 (“[t]he predictions of Shavell’s (1987) model are broadly

consistent with observed criminal justice policies when incapacitation is the exclusive purpose.

For example, in Kansas v. Hendricks, 521 U.S. 346, 372–74 (1997), the Supreme Court upheld a

state law authorizing the civil confinement of sex offenders who have completed their criminal

sentences. The Court concluded that further confinement was permissible when offenders suffered

from mental abnormalities rendering them likely to re-offend and unlikely to be deterred by the

threat of incarceration. Thus, the Court has permitted in limited circumstances confinement

solely for the purpose of incapacitation.”) 68 Miceli, Deterred or Detained?, supra note 17, at 1 (referring to Polinsky & Shavell, Public Enforcement of Law; Polinsky & Shavell, Economic Theory of Law Enforcement, supra note 2). 69 See, Polinsky & Shavell, Public Enforcement of Law, supra note 2, at 419. (“Under the strict

sanctioning rule […] it never is optimal to employ a prison sentence unless the fine has been set

as high as possible, since fines are socially cheaper sanctions. Whether it is optimal to use a prison

sentence in addition to the maximal fine depends on the extent of underdeterrence that would

result if fines were used alone, and the social cost of imprisonment.”)


21

from the fact that monetary fines do not ordinarily prevent offenders from

committing subsequent crimes. A weak rationale can be provided for in

exceptional cases where the commission of a crime requires some financial

means or investment. But, such explanations can certainly not match up to

the convincing explanations provided through deterrence based theories.

C. Deterrence: The Predominant Economic Theory of Punishment

As stated earlier, the main focus of economic theories of crime is

deterrence. Topics analyzed by employing economic crime and deterrence

models range from the very general, the optimal use of monetary versus non-

monetary sanctions, 70 the optimal standard of proof in criminal trials71, and

the punishment of attempts72; to the very specific, such as the optimal role of

apologies in sentencing,73 and sentence enhancements for hate crimes.74 What

is common among most normative economic analyses is the focus on the

deterrent effect of various laws and procedures, which is implied by the

assumption that potential criminals react to changes in criminal law rules. As

briefly discussed in subsection I.A., supra, it is assumed that greater expected

penalties lead to more deterrence.

However, increasing the expected punishment to achieve deterrence is

costly. The most commonly identified costs in the existing literature include

detection and imprisonment.75 As such, a trade-off emerges between reducing

such costs and increasing deterrence. Since there are a number of variables

affecting this trade-off, the optimal method of addressing it is circumstance

70 See, e.g., Mitchell A. Polinsky & Steven Shavell, The Optimal Use of Fines and Imprisonment, 24 J. PUB. ECON. 89 (1984); Mitchell A. Polinsky, The Optimal Use of Fines and Imprisonment When Wealth is Unobservable, 90 J. PUB. ECON. 823 (2006); Steven Shavell, Criminal Law and the Optimal Use of Nonmonetary Sanctions as a Deterrent, 85 COLUM. L. REV. 1232 (1985);

Steven Shavell, The Optimal Use of Nonmonetary Sanctions as a Deterrent, 77 AM. ECON. REV.

584 (1987); Louis Kaplow, A Note on the Optimal Use of Nonmonetary Sanctions, 42 J. PUB.

ECON. 245 (1990). 71 See, e.g., Henrik Lando, Prevention of Crime and the Optimal Standard of Proof in Criminal

Law, 5 REV. L. & ECON., 33 (2009); Thomas J. Miceli, Optimal Prosecution of Defendants whose Guilt Is Uncertain, 6 J. L., ECON. & ORG. 189 (1990); Murat C. Mungan, A Utilitarian Justification for Heightened Standards of Proof in Criminal Trials, 167 J. INSTITUTIONAL & THEORETICAL

ECON. 352 (2011); Okan Yilankaya, A Model of Evidence Production and Optimal Standard of Proof and Penalty in Criminal Trials, 35 CANADIAN J. ECON. 385 (2002); Matteo Rizzolli &

Margherita Saraceno, Better That Ten Guilty Persons Escape: Punishment Costs Explain the Standard of Evidence, PUB. CHOICE (forthcoming), available at http://dx.doi.org/10.1007/s11127-

011-9867-y. 72 See, e.g., Steven Shavell, Deterrence and the Punishment of Attempts, 19 J. LEGAL STUD. 435

(1990); Murat C. Mungan, Welfare Enhancing Regulation Exemptions, 31 INT’L REV. L. & ECON.

249 (2011). 73 See, e.g., Mungan, Apologies, supra note 24. 74 See, e.g., Dhammika Dharmapala & Nuno Garoupa, Penalty Enhancements for Hate Crimes: An Economic Analysis, 6 AM. L. & ECON. REV, 185 (2004). 75 See, e.g., Polinsky & Shavell, Public Enforcement of Law, supra note 2.


22

specific. The standard economic model of crime and deterrence is appealing

and quite successful, at least in part, because of its ability to generate such

fact specific trade-offs.

Although there is a broad and sophisticated literature on the

economics of crime and deterrence,76 which prevents a brief and

comprehensive review, a few key points are worth highlighting. The main

trade-off, as stated, is between reducing costs required to increase expected

punishment and increasing the benefits associated with deterrence. A few

corollaries immediately follow. Ceteris paribus, the greater the harm

associated with crime, the more important the benefits associated with

deterrence.77 Similarly, all else equal, the greater the deterrent effect of

punishment, the greater the justification for imposing punishment.78

D. Combining Incapacitation and Deterrence?

This last observation highlights a caveat in deterrence based theories.

Consider a society consisting of two types of individuals: undeterrable

criminals, and non-criminals (i.e. individuals, who never commit crime). In

such a society, deterrence based theories suggest that crimes should go

unpunished, because punishment would have absolutely no deterrent effect.

As such, punishment –in an economic deterrence model— would only generate

imprisonment and detection costs, without any benefits. Therefore, it would be

optimal to not punish criminal acts. 79

This caveat demonstrates how the standard economic model of crime

can benefit from the incorporation of the incapacitation function and benefits

of punishment. Imprisoning undeterrable criminals in such a society makes

sense if one recognizes the fact that criminals can repeatedly commit crime,80

and the prevention of future crime requires imprisonment, even if punishment

has no effect of deterring crime in the present.

This observation leads one to ask whether by combining deterrence

and incapacitation, an economic model can address the criticisms directed at

previous economic analyses of crime, and have sufficient explanatory power.

76 Id. 77 See, e.g., Steven Shavell, Specific versus General Enforcement of Law, 99 J. POL. ECON. 1088

(1991), at 1094-1095. 78 See, e.g., Mungan, supra note 48 (constructing a model where the frequency and severity of the

optimal sanction is increasing in the proportion of individuals who are deterrable). 79 See Miceli, supra note 44, at 32, (making the same observation: “the economic model offers no

rationale for punishing offenders who are undeterrable”). 80 A legal economist may object to this statement by claiming that crimes committed by

undeterrable individuals may be efficient. I address this issue in section IV infra.


23

The answer is no,81 unless some of the assumptions in the standard economic

model of crime can be replaced with new and more useful ones. To see why,

consider whether such a model would be capable of explaining why it makes

sense to punish repeat offenders more severely than first time offenders.

In standard economic models of crime, the combined incapacitative

and deterrent benefits of punishing a repeat offender and punishing a first

time offender are roughly the same. A first time offender, by committing a

crime, reveals high and constant propensity to commit crime. As such,

committing a subsequent crime, and becoming a repeat offender, reveals very

little information concerning his dangerousness.82

This is illustrated in Professor Thomas Miceli’s recent work jointly

analyzing deterrence and incapacitation in a theoretical L&E model of law

enforcement.83 Since Miceli’s article does not incorporate fluctuating criminal

tendencies, his model does not capture the information-exploiting feature of

repeat offender laws. Specifically, a first time offender completely reveals his

dangerousness by committing crime. Miceli makes a similar observation:

the threat of imprisonment deters some

offenders from committing dangerous crimes

in the first place, while those offenders who

reveal their predilection to commit crimes in

spite of the threatened punishment should be

imprisoned for life on their first apprehension

in order to prevent them from having further

criminal opportunities.84

An economic model that can provide a satisfactory explanation as to

why repeat offenders ought to be punished more severely must be capable of

incorporating the informative value of an offender’s prior record. This cannot

be achieved in standard models of crime and deterrence, unless some of their

81 See Miceli, Deterred or Detained?, supra note 17; and Miceli, Deterrence and Incapacitation,

supra note 17, for examples models combining deterrence and incapacitation, which are, as

demonstrated below, incapable of providing rationales for punishing repeat offenders more

severely. 82 This brief analysis abstracts from the fact that more severe punishments for repeat offenders

makes the expected costs of committing subsequent crimes higher. Similarly, it abstracts from the

hypothesis that stigma costs are highest for first time offenders. See, e.g., Eric Bennett Rasmusen.

Stigma and Self-Fulfilling Expectations of Criminality, 39 J. L. & ECON. 519 (1996); Patricia

Funk, On the Effective Use of Stigma as a Crime-deterrent, 48 EUR. ECON. REV. 715 (2004); Alon

Harel & Alon Klement The Economics of Stigma: Why More Detection of Crime May Result in Less Stigmatization," 36 J. LEG. STUD. 355 (2007). These effects which go in opposite directions,

and to some extent cancel each other out, should not affect the analysis significantly. 83 See, e.g., Miceli, Can the Twain Meet?, supra note 17. 84 Id. at 32.


24

unrealistic assumptions are replaced with new, realistic and useful

alternatives.85 In section IV, I consider a candidate for such a replacement,

namely the substitution of constant criminal benefits with fluctuating

criminal tendencies. Before doing so, it will be useful to describe how constant

benefits are incorporated in standard crime and deterrence models, and what

problems they cause.

III. IMPLICIT ASSUMPTION OF CONSTANT CRIMINAL TENDENCIES &

FAILURES OF LAW AND ECONOMICS AS A POSITIVE THEORY OF LAW

ENFORCEMENT

As discussed in the previous section, economic theories of law

enforcement focus predominantly on deterrence.86 This is because normative

economic analyses of incapacitation have not revealed many interesting

results,87 and because many scholars have deemed rehabilitation, the last of

“[t]he three basic measures of crime control most frequently discussed in the

criminological literature,”88 to be an ineffective tool to reduce crime.89

Furthermore, the reluctance of economists to incorporate

rehabilitation in normative theories of crime reflects an implicit belief that

criminals’ attitudes are hard to change through institutions, or at least that

achieving such changes would have “counterdeterrent” effects.90 This implicit

belief may have produced some spill-over effects: the unwillingness of

economists to consider institutionally incited changes in criminal attitudes

may have led them to overlook or ignore the possibility that criminals’

attitudes may change due to internal, and possibly even external and random,

events. This is consistent with the fact that an overwhelming majority of

economic theories of crime invoke an implicit or explicit assumption of

constant criminal tendencies.

85 Professor Miceli seems to agree with this conclusion. He states: “the current model with fully

rational offenders provides no basis at all for waiting until the third (or even the second) offense to

impose the maximal sentence. Explaining this provision of the law therefore requires further

elaboration of the basic model.” id. at 32. The acknowledgment of fluctuating criminal tendencies

can be interpreted as the “further elaboration” that Professor Miceli refers to. 86 See supra note 57 and accompanying text. 87 See supra section II. 88 Ehrlich, supra note 19, at 311. 89 See supra subsection II.A.. 90 See supra note 60.


25

A. Constant Criminal Tendencies Assumption

To see how the constant criminal benefits assumption is invoked in

standard crime and deterrence models, consider the simple Beckerian

framework introduced earlier, in Section I.A., supra. In this framework,

potential offenders are, by definition, people who have positive benefits (b’s)

from committing crime, despite the moral cost. If a person has a non-positive

benefit, then this would immediately imply that she would be deterred from

committing crime, even at the presence of the smallest possible expected

punishment (i.e. b≤0<(p x s)). Whether potential offenders (i.e. people with

b>0) decide to commit crime, depends on whether the expected sanction (p x s)

is sufficiently high.

Consider David, who is often in a position where he does not have

enough change to feed parking meters. When he has to park his car, and has

no change, he would rather pay up to $25, than drive around and find change

to feed the meter.91 In this case, David’s illicit (though not criminal) benefit

(b)92 from illegally parking his car is $25.93 If, for instance, David estimates

that his probability (p) of getting a parking ticket is 1/10, and the monetary

fine (s) for illegal parking is $100, then he chooses to park his car illegally

whenever he does not have enough change to feed the meter. This follows,

because his illicit benefit ($25) exceeds his expected loss from parking illegally

((1/10) x $100 = $10).

Existing economic theories of law enforcement implicitly or explicitly

assume that David’s illicit benefit from illegal parking is always $25. In other

words, David’s illicit benefit from illegal parking is constant. This, coupled

with the assumption that David has perfect self-control, implies that

whenever David has to choose between illegally parking and not parking, he

91 Assume that David cannot find parking meters that are out of order. 92 Illegal parking is a good example for demonstrating how the simple Beckerian model works,

although it is considered a civil infraction and not a crime in many jurisdictions. This is because

(i) the sanction is purely monetary, (ii) the monetary sanction is not high enough to trigger the

judgment proof offender problem (See Steven Shavell, The Judgment Proof Problem, 6 INT’L REV.

L. & ECON. 45 (1986) (describing the judgment proof problem: “Parties who cause harm to others

may sometimes turn out to be ‘judgment proof,’ that is, unable to pay fully the amount for which

they have been found legally liable.”)), and (iii) counting the offender’s benefit in the social welfare

calculus is less controversial then in the criminal context (Becker, supra note 15, includes criminal

benefits in the social welfare calculus. For a criticism of this approach, see George J. Stigler, The Optimum Enforcement of Laws, 78 J. POL.. ECON. 526 (1970). A recent working paper by

economics professors Philip A. Curry and Matthew Doyle contributes to this debate by showing

that criminal benefits may be irrelevant, even if accounted for, in a utilitarian framework. See

Philip A. Curry and Matthew Doyle, Social Welfare and Benefits to Crime, available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1987177.) The discussion in the proceeding

parts extends the analysis to more conventional crimes. 93 For purposes of this example, it is harmless to ignore David’s legal compliance cost: He would

have had to incur the cost of feeding the meter, were he to comply.


26

will make the same decision, as long as the expected sanction remains the

same. To prevent potential confusion, it should be noted that a similar

constancy assumption is not invoked across individuals. As stated earlier,

potential offenders are assumed to differ from each other in their illicit

benefits. Another person, Jay, may have an illicit benefit of $5 from illegal

parking. The assumption of constant benefits refers to Jay’s and David’s

unchanging benefits from illegal parking of $25 and $5, respectively.

The reliance on constant illicit benefits is best demonstrated in the

broad and expanding economic analysis of optimal punishment of repeat

offenders. Such analysis considers models in which potential offenders are

assumed to have multiple opportunities to commit an illegal act. Those who

are caught multiple times committing the offense are called repeat offenders.

Economic models are used to determine conditions under which repeat

offenders ought to be punished more severely than first time offenders.94

Often, the assumption of constant benefits is invoked implicitly95 by assigning

the same benefits (b) to individuals across multiple opportunities. Sometimes

the assumption is invoked explicitly. The best example is Polinsky and

Shavell’s 1998 article on repeat offenders,96 which summarizes the assumption

that individuals differ from each other in their illicit and constant benefits:

“[t]he magnitude of the benefit is the same in both periods for a given

individual but varies among individuals.”97

94 For a short list of articles taking this approach, see, e.g., supra note 12. 95 See, e.g., Mungan, Repeat Offenders, supra note 24 (presenting a two-period crime and

deterrence model, where potential offenders have two opportunities to engage in an illegal act. As

is evident from the analysis, potential offenders are assumed to derive the same expected benefit

from committing the offense in each period. This assumption of constant benefits is not explicitly

stated in the article). 96 See also Miceli, Deterrence and Incapacitation, supra note 17, at 205 (invoking the constant

benefit assumption explicitly: “Assume that potential offenders have infinite life spans. At time

zero, they each take a random draw of the monetary gain from committing a crime, g, which is

distributed by the density function z(g). Each offender's realized g will remain his “type”

throughout his life (thus, each offender will make the same choice each time he is confronted with

a criminal opportunity)”). 97 Polinsky & Shavell, supra note 21, at 307. The authors note that their results would not be

affected if they were to assume random benefits from crime, showing that they have not

overlooked, but assumed away, random benefits from crime, presumably because the

incorporation of random benefits does not add anything but over-complicates their analysis. The

assuming away of random benefits in Polinsky & Shavell, supra note 21, is harmless, mainly

because the model is deterrence based and does not formally incorporate incapacitation. In fact,

the authors acknowledge that if incapacitation was considered in the model, then information on

prior offenses could be used to evaluate the propensity of an individual to commit crime. In section

V, infra, I argue that criminal records provide relevant information about a repeat offender’s

propensity to commit crime only when people have fluctuating tendencies to commit crime.


27

One can imagine many reasons as to why the assumption of constant

benefits from crime is not a realistic one.98 Jay, being a patient person, may on

average have an illicit benefit from illegal parking of $5. But, what if he is in a

hurry? What if he is hungry, or angry? In these situations, his benefit from

illegal parking may greatly exceed $5. As such, Jay’s benefits may vary based

on circumstances. Such variation, in standard L&E models, implies

fluctuating, rather than constant criminal tendencies.

A second source of fluctuation in criminal tendencies is related to

variations in individuals’ self-control over different psychological states. Even

if a person’s true benefit from an illegal act remains constant, he may still

commit it today and refrain from committing it tomorrow. For instance, a

person, who is ordinarily deterred from attacking people who he hates (due to

expected sanctions), may temporarily lose his ability to compare costs and

benefits when he is provoked. In these cases, criminal benefits and tendencies

may diverge. Such divergences are discussed in further detail in section IV,

infra.

In short, law enforcement models make use of the unrealistic

assumption that people have constant criminal tendencies. But, economists

always make use of simplifying assumptions.99 The question is not whether

these assumptions are unrealistic, but whether their use affects results.

To demonstrate that the assumption of constant tendencies is not only

simplifying but misleading, I proceed by summarizing a number of conclusions

that are derived in law enforcement models making use of constant

tendencies, which are in tension with various legal practices, and in section V,

I argue that this tension disappears when one relaxes the assumption of

constant criminal tendencies.

B. Divergences Between Normative Law and Economics and Actual Legal

Practices

Despite L&E’s success as a legal discipline,100 there are some

important conflicts between the suggestions of normative L&E theories and

actual law enforcement mechanisms and practices. This suggests that (i) some

98 See Posner, supra note 12, (describing a number of reasons related to the potential offenders’

emotional states, as to why they may have different tendencies to commit crime at different points

in time). 99 See, e.g., Miceli, Deterrence and Incapacitation, supra note 17, at 205 (“offenders are infinitely

lived and potentially commit crimes throughout their lives”); Mungan, Repeat Offenders, supra

note 24, at 174 (“society consists of individuals who are continuously distributed over benefits”). 100 See note 1, supra.


28

legal practices are sub-optimal, and/or (ii) existing law and economic theories

make use of simplifying assumptions that are misleading.

There is an extensive literature investigating whether legal, and in

particular common law, institutions converge to efficiency over time through

some process of socio-legal or institutional evolution.101 In this Article, I do not

enter this debate, but focus on a more modest issue. Specifically, I investigate

whether it is possible to reconcile existing legal practices with the implications

of L&E models by relaxing a simplifying assumption, namely the constancy of

criminal tendencies. As such, I focus on (ii) above.

Next, I demonstrate the divergence between the implications of L&E

models and actual legal practices in three specific areas: (1) punishment of

repeat offenders, (2) treatment of remorse and apologies, and (3) punishment

of voluntary manslaughter.

1. Punishment of Repeat Offenders

“In practice, the law often sanctions repeat offenders more severely

than first-time offenders.”102 The 2011 Federal Sentencing Guidelines, for

instance, categorizes offenders based on their criminal records, and calls for

longer sentences for criminals with longer records.103 The Clean Water Act

similarly punishes repeat offenders by doubling the maximum criminal fines

and sentences for negligent violations of various sections of the Act.104 State

criminal statutes also call for increased sentences for repeat offenders through

‘three strike laws’.

The implications of law and economics studies are not as uniform, and

do not always suggest that repeat offenders should be punished more severely.

The simplest model of deterrence, for instance, suggests that detection history

should be completely irrelevant for determining optimal sentences:

101 See, e.g., Nuno Garoupa & Carlos Gómez Ligüerre, The Evolution of the Common Law and Efficiency, 40 GA. J. INT’L & COMP. L. (forthcoming), available at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1805141 and the references cited therein. 102 Polinsky and Shavell, supra note 21, at 305. 103 The guidelines require a complicated examination of the criminal’s previous record for purposes

of determining her “criminal history category”. There are six such categories, where category I is

reserved for ‘inexperienced’ criminals and category VI is for what may be called ‘habitual

criminals’. The appropriate sentence for a given crime is generally longer for a criminal in

category VI than a criminal in category I (unless the offense in question is level 1, 42, or 43. In

these cases both categories are assigned the same sentence: between 0-6 months for level 1, 360

months to life for level 42, and life for level 43). See Sentencing Table, 2011 FED. SENTENCING

GUIDELINES. 104 See 33 U.S.C. § 1319(c)(1).


29

If the [expected] sanction for polluting and

causing a $1,000 harm is $1,000, then any person

who pollutes and pays $1,000 is a person whose

gain from polluting (say the savings from not

installing pollution control equipment) must

have exceeded $1,000. Social welfare therefore is

higher as a result of his polluting. If such an

individual polluted and was sanctioned in the

past, that only means that it was socially

desirable for him to have polluted previously.

Raising the sanction because of his having a

record of prior convictions would overdeter him

now.105

This explanation, of course, is valid only under a set of simplifying

assumptions.106 Many scholars have extended the basic Beckerian framework

in various dimensions to analyze punishment schemes in richer settings. Such

extensions, however, have not always led to results that are consistent with

actual practices. In fact, there are economic models that suggest that it may be

a good idea to punish first time offenders more severely than repeat

offenders.107 Other models provide rationales as to why it may make sense to

punish repeat offenders more severely for purposes of achieving optimal

deterrence. These rationales, however, usually rely on restrictive conditions,

and results are far from being global.108

The mixed and qualified implications of law and economics studies of

optimal punishments for repeat offenders have led scholars to perceive the

105 Polinsky & Shavell, Public Enforcement of Law, supra note 2, at 438. It should be noted that

this explanation, as to why criminal history should not play a role in the simple crime and

deterrence model, implicitly relies on the offender’s benefit being constant, namely $1000 in the

past and in the present. It also relies on offenders’ benefits entering the social calculus. See supra

note 92, concerning the debate as to whether offenders’ benefits should enter the social calculus. 106 This is also noted in Polinsky & Shavell, Public Enforcement of Law, supra note 2. 107 See, e.g., Emons, supra note 24. 108 See Thomas J. Miceli & Catherine Bucci, A Simple Theory of Increasing Penalties for Repeat Offenders, 1 REV. L. & ECON. 71 (2005), at 78: (“this justification for escalating penalties, like

earlier theories, seems to apply to a fairly restrictive set of circumstances—specifically, crimes

that should definitely be deterred.”); Mungan, Repeat Offenders, supra note 24, at 173

(constructing a model where escalating punishments are optimal only if offenders “learn how to

evade the detection mechanism employed by the government”); C. Y. C. Chu, S.-C. Hu, & T.-Y.

Huang, Punishing Repeat Offenders More Severely, 20 INT’L REV. OF L. & ECON., 127 (2000)

(demonstrating that increasing penalties are better than uniform penalties, without comparing

them to decreasing penalties); Polinsky & Shavell, supra note 21 (constructing a model based on

less restrictive assumptions, but providing a rationale for slightly different sanction schemes than

escalating punishment schemes for repeat offenders).


30

problem as a ‘puzzle.’109 This ‘puzzling’ status, of escalating punishments for

repeat offenders in the law and economics literature, places it in sharp

contrast with the wide approval for punishing repeat offenders more severely

in actual practice.

2. Remorse and Apologies

Remorse can be a mitigating factor in determining a criminal’s

punishment. Although the instances in which the Federal Sentencing

Guidelines call for a reduction in sentences due to manifestations of remorse

are very limited,110 a number of states may “permit the use of remorse as a

mitigating factor.”111 Perhaps more importantly, manifestations of remorse,

such as apologies, can affect the way judges exercise discretion in sentencing

criminals. In fact, a number of previous studies discuss how judges are

tempted to impose shorter sentences when they are convinced that an offender

is remorseful.112

Consequentialist approaches studying the proper role of remorse and

its manifestations in the criminal justice system, however, suggest that they

should not be used as mitigating factors.113 Under simple consequentialist

analyses focusing exclusively on deterrence, this follows because remorse is by

109 See, e.g. David A. Dana, Rethinking the Puzzle of Escalating Penalties for Repeat Offenders,

110 YALE L. J. 733 (2001); Emons, supra note 12 (referring to the punishment of repeat offenders

more severely as a puzzle). 110 See U.S. SENTENCING GUIDELINES MANUAL § 5K2.16 (2011) (“downward departure under this

section might be considered where a defendant, motivated by remorse, discloses an offense that

otherwise would have remained undiscovered”). But, such sentence reductions are more closely

related to the “voluntary disclosure of offense” than the manifestation of remorse. As such, these

sentence reductions are completely consistent with the suggestions of economic studies of law

enforcement, which advocate a reduction in penalty for self-reporters (see, e.g., Louis Kaplow &

Steven Shavell, Optimal Law Enforcement with Self-Reporting of Behavior, 102 J. POL. ECON 583

(1994)). This makes sense from a purely economic perspective, because by self-reporting a person

increases his probability of being caught from some smaller probability to one, which reduces the

necessity of imposing costly sanctions to deter the criminal. This does not necessarily imply,

however, that apologies should lead to sentence reductions. See Mungan, Apologies, supra note 24,

at footnote 5 (arguing that self-reporting and apologies can be unbundled). 111 Paul H. Robinson, Sean Jackowitz & Daniel M. Bartels, Extralegal Punishment Factors: A Study of Forgiveness, Hardship, Good-Deeds, Apology, Remorse, and Other Such Discretionary Factors in Assessing Criminal Punishment 7 (Scholarship at Penn Law. Paper 362.) available at

http://lsr.nellco.org/upenn_wps/362, citing State v. Trostle, 951 P.2d 869, 887 (Ariz. 1997); Jackson

v. State, 684 So. 2d 1213, 1238 (Miss. 1996); State v. Allen, 994 P.2d 728, 764 (N.M. 2000); Pope v.

State, 441 So.2d 1073, 1078 (Fla. 1983); FLA. STAT. § 921.0026(2)(j). 112 See Stephanos Bibas & Richard A. Bierschbach, Integrating Remorse and Apology into Criminal Procedure, 114 Yale L. J. 85 (2004), at 99 (“… judges heed expressions of remorse and

apology and weigh them heavily at sentencing.”); Stanton Wheeler et al., SITTING IN JUDGMENT:

THE SENTENCING OF WHITE-COLLAR CRIMINALS 115 (1988) (extensively interviewing Extensive

interviews with 51 Federal judges in 7 districts and finding that “it is important for many judges

that defendants recognize the gravity of their offense, accept the blame for their misdeeds, and

express remorse or contrition for them”) 113 See note 24, supra.


31

definition an ex post concept, and therefore it should be irrelevant for

deterring criminals ex ante.114 In addition, apologies are viewed as mere

‘cheap talk’115 making them “non-informative of an individual's conscious

state”116 and non-credible.117 Furthermore, the prospect of having a sentence

reduction for apologizing reduces deterrence. Finally, a system where

convincing apologies lead to reduced penalties generates asymmetric

incentives for potential offenders, because of the difficulty in “sort[ing] out the

truly remorseful defendant from the unrepentant but savvy defendant.”118.As

demonstrated by a number of articles, asymmetric incentives can lead to costs

associated with under- as well as over-deterrence.119

In short, there is a divergence between the way remorse and apologies

are treated in the criminal justice system, and the way they ought to be

treated according to simple but meticulous consequentialist analyses of

manifestations of remorse.

3. Voluntary Manslaughter

Voluntary manslaughter is punished less severely than murder.120

From a simple deterrence based law and economics perspective, such

reductions appear to be problematic. Unless the degree of control one can exert

fluctuates over time and circumstances, it is hard to understand why the law

reduces the punishment for killing when committed in the “heat of passion,”

without sufficient “cooling time” and produced by an “adequate

provocation.”121 It is, therefore, not surprising that the deterrence based

justification for such reductions, offered by Eric Posner,122 relies on a variant

of fluctuating criminal tendencies, a concept explained in further detail in the

next section.

The consequentialist rationale identified by Posner for punishing

voluntary manslaughter less severely than murder focuses on the fact that

voluntary manslaughter is generally hard –and sometimes impossible—to

114 See Mungan, Apologies, supra note 24. 115 Robert H. Frank, Departures from rational choice: With and without regret, in THE LAW AND

ECONOMICS OF IRRATIONAL BEHAVIOR (Francesco Parisi and Vernon L. Smith eds. 2005), at 25. 116 See Mungan, Apologies, supra note 24, at abstract. 117 See Ward, supra note 24. 118 Id. at 164. 119 See, e.g., Shavell, supra note 72; Mungan, supra note 72. 120 See supra note 23. 121 See Kahan & Nusbaum, supra note 9, at 305 (summarizing what constitutes voluntary

manslaughter and quoting Wayne R. LaFave & Austin W. Scott,Jr., CRIMINAL LAW § 7.10 (2d ed.

1986)). 122 Posner, supra note 12.


32

deter.123 As such, reductions in punishment are justified because “expensive

sanctions should not be wasted on people who cannot be deterred by them.”124

This reasoning relies on the fact that people experience intense anger under

extraordinary circumstances, and under the stimulus of such emotions they

are very unresponsive to punishment, and therefore hard to deter.125

Accordingly, Posner’s rationale relies on people being less able to exert control

over their actions when they find themselves in extra-ordinary circumstances,

which is a violation of the constant benefit assumption discussed earlier.

Although Posner’s rationale is very appealing, it has a caveat which

can be exploited by scholars who disfavor consequentialist approaches. A

criticism which may be directed at Posner’s claim can be formulated in a few

steps. First, since courts cannot perfectly identify whether people were

undeterrable at the time they committed crime, they must rely on blunt

proxies to decide whether a killing should be classified as voluntary

manslaughter. Second, since such blunt proxies are over-inclusive, they

classify some killings committed by deterrable individuals as voluntary

manslaughter. Therefore, sanction reductions for voluntary manslaughter

may have the effect of lowering deterrence for individuals who are indeed

deterrable.126 Furthermore, individuals who are less responsive to

punishment, but not completely undeterrable, may require penalty

enhancements to be deterred from committing crime.127

In section V, I demonstrate that Posner’s argument can be

strengthened in a framework incorporating the incapacitation function of

punishment, as well as fluctuating criminal tendencies.

C. Constant Criminal Tendencies, and Their Role in the Divergences

between Normative Law and Economics and Actual Legal Practices

So far, I have demonstrated that there is a divergence between what

simple law enforcement models suggest the law ought to be, and how the law

actually manifests itself. Since simple law enforcement models rely on the

simplifying assumption that criminals have constant criminal tendencies, this

123 Id. at 1993-1995. 124 Id. at 1994. 125 Id. 126 See Kahan & Nussbaum, supra note 9, at 310 (making a similar point “But how can a

consequentialist be sure that the savings from relaxing one offender's punishment on this ground

will not be offset by the deterrence-undermining effects of such a disposition on the behavior of

others who find themselves in such situations for the first time?”) 127 See, e.g., Moin A. Yahya, Deterring Roper's Juveniles: Using a Law and Economics Approach to Show that the Logic of Roper Implies that Juveniles Require the Death Penalty More Than Adults, 111 PENN. ST. L. REV. 53 (2006) (arguing that severe penalties, such as the death penalty,

are required and justified to deter juveniles, who may be harder to deter than adults)


33

assumption may be responsible for the divergences between normative law

and economics and actual legal practices. But is it?

In section V, I demonstrate that the implications of economic models

capable of producing fluctuating criminal tendencies are more consistent with

actual legal practices and intuitions. It should be noted that a simple

departure from constant criminal tendencies is, in most cases, insufficient to

achieve these results. As noted earlier, it is necessary to move from a simple

deterrence based framework to one that incorporates the deterrence and

incapacitation functions of criminal justice systems. As such, fluctuating

criminal tendencies, as defined in the next section, are necessary but not

sufficient to provide economic justifications for the practices summarized in

the previous subsection.

IV. INTEGRATING FLUCTUATING CRIMINAL TENDENCIES INTO THE

ECONOMIC THEORY OF CRIME

In section III, I briefly commented on two reasons as to why people

may have fluctuating, rather than constant, criminal tendencies. First, people

may have different benefits from the same illegal activity at different points in

time. Second, people may possess different degrees of self-control at different

points in time.

This section, for pedagogical reasons, begins by focusing on the first

factor, and formalizes how fluctuating criminal tendencies can be incorporated

into standard L&E models. Then, in subsection IV.C., I draw on insights from

the behavioral L&E literature to incorporate the second factor, namely that

people may lack perfect self-control.

A. Incorporating Fluctuating Tendencies

Standard crime and deterrence models assume that a person’s

tendency to commit crime is defined through his/her constant benefits from

crime. Using the previously introduced framework128 a person commits a

crime if his constant benefit (b) exceeds the expected punishment from the

crime (p x s). This framework can be altered easily to incorporate fluctuating

128 See supra subsection I.A..


34

criminal tendencies: instead of assuming that b is constant, one can assume

that it is a random variable.129

Random variables take on values through stochastic processes. To be

more specific, we may refer to one of our previous examples. Jay may have a

certain tendency to park illegally under normal circumstances, but this

tendency may be greater when he is impatient or in a hurry. The instant

purpose is not to elaborate on specific conditions which may change Jay’s illicit

benefits,130 but to identify a simple way to incorporate his fluctuating criminal

tendencies in standard economic theories of crime, namely by converting b into

a random variable.

To exemplify how random variables can be included in standard

economic theories of crime, let us begin by making the extreme assumption

that the only three psychological states that Jay can find his self in are calm,

impatient, and frustrated, and that his benefits in these three states,

respectively, are $5, $20, and $30. Assume further that half of the time Jay is

calm, a quarter of the time he is impatient, and the other quarter of the time

he is frustrated. In this case, Jay’s fluctuating illicit benefits can be

represented by the probability function131 depicted in figure 1.

129 A random variable describes the outcome generated through a stochastic or random process.

“Consider an experiment in which a person is selected at random from some population and her

height in inches is measured. This height is a random variable.” PROBABILITY AND STATISTICS

(Morris H. DeGroot & Mark J. Schervish eds. 2002) at 98. By using mathematics, a more precise

definition can be provided: “Consider an experiment for which the sample space is denoted by S

[i.e. Pr(S)=1, where Pr(X) denotes the probability of X occurring]. A real-valued function that is

defined on the space S is called a random variable. In other words, in a particular experiment a

random variable X would be some function that assigns a real number X(s) to each possible

outcome s S.” Id. at 97. Section IV, infra, discusses how fluctuating criminal tendencies can be

modeled by making use of random variables. 130 See Posner, supra note 12 (providing a detailed discussion as to why individuals’ criminal

tendencies may fluctuate). 131 For probability functions, see DeGroot et al., supra note 129, at 99. Here, Jay’s benefit from

illegal parking can take on a finite number of values, namely three. To reflect this fact an

economist would say that Jay’s benefit from illegal parking is a discrete random variable. More

precisely and generally “It is said that a random variable X has a discrete distribution or that X is

a discrete random variable if X can take only a finite number k of different values x1,…,xk or, at

most an infinite sequence of different values x1, x2, ….”, see id. To describe probabilities with

which a discrete random variable takes on specific values, we use probability functions (PF). It

follows that “the probability function […] of X is defined as the function f such that for every real

number x,

f(x)=Pr(X=x).”

Using this notation the PF describing Jay’s illicit benefits can be expressed as:

0.5 if x=5

f(x)= 0.25 if x=20

0.25 if x=30


35

In this simple case, if the expected fine is $10, as in our previous

example in section III.A., supra,132 Jay will decide to park illegally only half of

the time when he does not have sufficient change to feed the meter. This is

conveniently demonstrated in figure 1, which compares the expected fine from

illegal parking ($10) with Jay’s illicit benefits when he is calm ($5), impatient

($20), and frustrated ($30). Since Jay’s illicit benefits exceed the expected fine

from illegal parking when he is either impatient or frustrated, and since he is

impatient or frustrated half of the time, Jay will decide to park illegally half of

the time when he does not have sufficient change to feed the meter. This

frequency, through no coincidence, corresponds to the probability obtained by

summing the heights of the boxes to the right of the expected fine (i.e. $10) in

figure 1: ¼+¼=½.

It is plausible to assume, of course, that in reality people do not have

three potential psychological states but many, perhaps an infinite number.133

To incorporate this assumption, we can allow b to take on an infinite number

of values. Furthermore, for expositional purposes,134 we may assume that b is

distributed around a certain value most of the time and that it rarely deviates

from that value significantly. Specifically, we may assume that Jay’s benefits

132 Recall that the expected fine is $10 because the probability of detection, p, is 1/10, and the

monetary fine, s, is $100. 133 As Posner, supra note 12, also observes, people may experience emotions with different

intensities (e.g., one may be very angry, angry, slightly angry, not angry at all, etc.). Assuming

that there are infinitely many different intensities of anger corresponds to the assumption just

mentioned. 134 The exact distribution obviously depends on the person and the illegal activity in question. The

purpose here is to give an example of how b can potentially be distributed. The arguments in the

next section do not rely on these specific assumptions.


36

from illegal parking vary between $0 and $30,135 and most of the time his

benefits are between $4 and $6. In this case Jay’s probability density function

PDF136 over illegal parking can be represented by the following graph.

When a PDF is used, as in figure 2, to represent Jay’s fluctuating

tendency to park illegally, the probability with which Jay’s illegal benefit

exceeds the expected fine can no longer be measured by focusing on the height

of the boxes representing probabilities, as in the discrete distribution137 case

represented by figure 1, supra. Instead, we must focus on the area that lies

below the PDF and to the right of $10. The size of this area, i.e. Area A in

figure 2, represents the probability with which Jay’s illegal benefit exceeds the

expected fine of $10. It should also be noted that since Jay’s benefit from

illegal parking is assumed to always lie between $0 and $30, the entire area

below the PDF in figure 2 (shaded in gray) corresponds to a probability of 1.

135 It is implicitly assumed that Jay’s benefits can take on any real number between 0 and 30. If

benefits are assumed to take on values corresponding to whole dollars, for instance, then his

benefits can take on only 31 different values, i.e. $0, $1, $2, …, $28, $29, $30), in which case a PF,

as in figure 1, supra, would better represent Jay’s fluctuating benefits from illegal parking. 136 Since Jay’s benefit “can assume every value in an interval”, it has a “continuous distribution”,

DeGroot et al, supra note 129, at 103. More generally, “It is said that a random variable X has a

continuous distribution or that X is a continuous random variable if there exists a nonnegative

function f, defined on the real line, such that for every subset A of the real line, the probability

that X takes a value in A is the integral of f over the set A.” Id. For instance, if A=(4,6], then

( ) ∫ ( )

“The function f is called the probability density function … of X.” Id. 137 See supra note 131.


37

B. Multiple Potential Offenders with Fluctuating Tendencies

So far, we have focused on the potential illicit benefits of a single

person (namely Jay). But, as stated in section III, different individuals may

have different tendencies to commit crime, or, in our case, park illegally.

These differences in tendencies can conveniently be represented by making

use of multiple PDFs, one for each individual in society.

Consider, for instance, David, a person who is more likely than Jay to

park illegally, because he is on average less patient (or values his time more).

Then, David’s tendency to park illegally can be captured by a PDF that

assigns high probabilities to greater benefits from parking illegally. Figure 3

demonstrates how different PDFs can be used to represent individuals with

different tendencies to park illegally.

As can be inferred from figure 3, David is more likely to park illegally

than Jay, because his benefit from illegal parking is more likely to exceed the

expected fine of $10. Specifically, Area D (the dotted area) is greater than Area

J (the semi-transparent gray area) in figure 3, which respectively represent

the probabilities with which David and Jay will have benefits from illegal

parking exceeding $10.

These examples focus on illegal parking, because it is an ‘offense’

which many people have committed, perhaps multiple times. As such, most

people can relate to the idea of having fluctuating benefits or tendencies by


38

reflecting on their own experiences with illegal parking. It is not hard to

imagine, however, how this framework can be extended to analyze more

serious offenses and crimes.

C. Insights from Behavioral Economics and Divergences between

Criminal Tendencies and Benefits

Previously, when referring to illegal parking, I characterized the

offender’s fluctuating tendency to park illegally as a direct result of

fluctuations in his actual benefits from parking.138 This was mainly for

pedagogical reasons, and to introduce fluctuating tendencies in an easily

comprehensible way. It is not hard to imagine that people may temporarily act

in ways that do not serve their best interest. In such cases, criminal

tendencies and benefits diverge.

When it comes to battery, for example, many people presumably have

criminal benefits distributed around zero. Despite this fact, it is not hard to

imagine exceptional cases where the same people have significantly high

criminal tendencies; a person who is hungry and hypoglycemic may be

tempted to attack a person who she finds irritating, a fanatic soccer team

supporter may temporarily find it in his best interest to attack a person

insulting his team, a person who comes home and finds his wife in bed with

another person may lose control and attack that person or his wife.139

These observations reveal the fact that people have fluctuating

criminal tendencies. But, how one interprets criminal tendencies vis a vis

criminal benefits may have important implications concerning the desirability

of various punishment schemes from a consequentialist perspective, even if

under a limited set of circumstances.140

138 See, e.g., supra Section IV.A. (“let us begin by making the extreme assumption that the only

three psychological states that Jay can find his self in are calm, impatient, and frustrated, and

that his benefits in these three states, respectively, are $5, $20, and $30”). 139 “On February 8, 1994, a Maryland trucker named Kenneth Peacock came home unexpectedly

during a winter storm and found his wife in bed with another man. For several hours Peacock

argued with his wife while drinking wine and beer. Then he shot her in the head with a hunting

rifle. Peacock plead guilty to voluntary manslaughter.” Lynn Hecht Schafran, There’s No Accounting for Judges, 58 ALB. L. REV. 1063 (1995). 140 The interpretation is irrelevant if criminal benefits are not included in the social welfare

calculus. See note 92, supra, briefly noting the debate on whether criminal benefits should be

included in the social welfare calculus. This follows trivially, because what matters is not whether

and how much the criminal benefits from his actions, but simply his likelihood or tendency to

commit crime. Moreover, even if criminal benefits are included in the social welfare calculus, the

distinction is unimportant in cases where the harm associated with the crime is not exceeded by

any potential offender’s benefit from crime. In this case, there are always benefits from deterrence

as well as incapacitation, which is the main observation that I rely on in conducting the analysis

in section V. The only case where the absence of divergences between benefits and tendencies may


39

In particular, if one includes criminal benefits in the social welfare

calculus,141 then one cannot immediately rule out the possibility that

individuals with high tendencies to commit crime are committing efficient

crimes.142 Specifically, if the expected punishment for a crime is set at a

significantly high level, and a person is still not deterred from committing that

crime, one may incorrectly conclude that the crime must have been efficient.143

Because I invoke assumptions that contradict this conclusion, I first explain

why it is incorrect.

There are at least three reasons as to why the commission of a crime,

despite very high penalties, does not imply that the criminal possesses

benefits that exceed the harm inflicted through crime. First, some criminals,

even if they are completely rational, are non-deterrable. Some criminals

simply do not view imprisonment as a significant punishment.144 The fact that

have a substantial effect on the analysis is when criminal benefits are included in the social

welfare calculus and there are criminals whose benefits exceed the harm inflicted through crime.

In this particular case, interpreting tendencies as occasionally diverging from benefits supports

my analysis. This is the case analyzed in the proceeding paragraphs. 141 See note 92, supra, briefly noting the debate on whether criminal benefits should be included in

the social welfare calculus. 142 A crime is defined to be efficient if the social harm from crime is exceeded by the criminal

benefits enjoyed by the criminal. With crimes leading to monetary losses, it is easy to see how a

crime can be efficient. If the only loss –all direct and indirect costs included- created by the crime

is worth 100$, and if the criminal is willing to pay 101$ to commit that crime, the crime is

efficient. For other, more serious offenses, such as murder, the harm inflicted through crime is

extreme, and it may be plausible to assume that no criminal benefit can exceed the harm inflicted

through murder. But, in this Article, I am not making this assumption, because it does not appear

to be necessary. Instead, I am making the weaker assumption that –at any relevant punishment

level— serious crimes committed by offenders are on average inefficient. I support and explain

this assumption in further detail in the proceeding paragraphs. 143 This is a commonly invoked argument in the law enforcement literature. Its simplest form can

be stated more discretely as follows. If h is the harm from crime, p is the probability and s the

severity of punishment, then setting s=h/p implies that a risk-neutral potential offender will

commit crime, if and only if, his benefit exceeds the harm from crime, which makes the crime

efficient. See infra note 145 showing why this argument does not generalize to cases where

sanctions have differential deterrent effects on people. 144 Consider, for instance, the case of Earl Albert Moore, an attempted bombing suspect, who,

according to his former son-in-law “did what he did because he wanted to go back to prison.” See

Jeffrey Wolf & Will Ripley, Relative: Southwest Plaza Mall Bomb Suspect 'Wanted to go Back to Prison', 9NEWS.COM, Apr. 26, 2011, available at http://www.9news.com/news/story.aspx?storyid=195506&catid=222. See also Jazmine Ulloa, Convict Couldn't Handle Being Free, Sept. 25. 2011, MYSA, available at

http://www.mysanantonio.com/news/local_news/article/Convictcouldn-thandlebeing-free-

2187648.php ("Most inmates want out of the pen. Randall Lee Church burned a house down to get

back inside”); Andrew Marra, Man Charged in Robbery of West Palm Beach Bank of America Branch, Dec. 29 2010, PALM BEACH POST, available at

http://www.palmbeachpost.com/news/crime/man-charged-in-robbery-of-west-palm-beach-

1152346.html (“Police say Charles Latham, 47, robbed the Bank of America in downtown West

Palm Beach because he wanted to go back to prison.”)


40

such a person commits crime, despite an expected sentence of 100 years does

not imply that the crime committed by this person is efficient.145

The two remaining reasons come from behavioral economics, which

studies how people systematically deviate from common assumptions invoked

in standard economic analyses and how “human beings make systematic

mistakes in their decision making.”146 Systematic mistakes occurring due to

cognitive biases147 and bounded willpower148 appear to account for departures

from the common knowledge and deterrability assumptions discussed in sub-

sections I.C. and I.B., respectively, and thereby supply explanations for why

people may commit inefficient crimes even when expected sanctions are very

high.

Specifically, it is well documented that many people have cognitive

biases leading them to be over-confident and optimistic.149 This insight, when

applied to criminal law enforcement, suggests that criminals will tend to over-

commit crimes, i.e. they will commit crimes in cases where the expected utility

from committing crime exceeds their expected utility from refraining from

committing crime.150 Finally, people may possess bounded willpower, which

refers to the inability of a person to act in a manner that serves his long term

benefits, even when he is perfectly informed about the costs and benefits

associated with his actions.151 Criminals with bounded willpower will also

tend to over-commit crimes, since the presence of immediate criminal benefits,

145 In symbols, if p denotes the probability of conviction, h is the harm from crime, and ci(s) denotes the cost incurred by person i from being convicted for s years, then pci(s) <h can be true

for all s for some i. Therefore, there will be individuals with benefit b such that, pci(s) <b<h, who

commit, by definition, inefficient crimes. 146 McAdams & Ulen, supra note 50, at 406, (emphasis original). 147 See, e.g., id. at 417-421 (discussing cognitive biases in further detail). 148 See, e.g., Christine Jolls & Cass R. Sunstein, A Behavioral Approach to Law and Economics, 50

STAN. L. REV. 1471 (1998) (discussing bounded willpower in further detail). 149 See, e.g., Christine Jolls, On Law Enforcement with Boundedly Rational Actors, in THE LAW

AND ECONOMICS OF IRRATIONAL BEHAVIOR (Francesco Parisi and Vernon Smith eds., 2004) (“[A]

highly robust feature of human behavior is that people underestimate the probability that

negative events will happen to them as opposed to others”). See also Neil D. Weinstein,

Unrealistic Optimism About Future Life Events, 39 J. PERSONALITY & SOC. PSYCHOL. 806 (1980);

Neil D. Weinstein, Unrealistic Optimism About Susceptibility to Health Problems: Conclusions from a Community-Wide Sample, 10 J. BEHAV. MED. 481 (1987); McAdams & Ulen, supra note 50;

Russell B. Korobkin & Thomas S. Ulen, Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics, 88 CAL. L. REV. 1051 (2000) (discussing issues related to

over-confidence and optimism biases). 150 A similar point is made by Korobkin & Ulen, supra note 149, at 1092. 151 This point was made by Professor Robert Cooter long before the recent literature on behavioral

law and economics emerged. See Cooter, supra note 12.


41

rather than delayed expected penalties, will guide their decisions to commit

crime.152

The fact that some criminals do not view imprisonment as a

particularly harsh punishment and the existence of cognitive biases suggest

that people may commit inefficient crimes, even when there are very high

expected penalties. As such, at any given level of punishment there can be

crimes, which confer criminal benefits that are exceeded by the social cost of

such crimes. In the proceeding parts of this Article, I will assume that –at all

relevant punishment levels— the proportion of inefficient crimes is relatively

high, such that there are expected benefits from deterring crimes and from

incapacitating individuals with a likelihood of recidivating.153

Having introduced the reasons as to why people may possess

fluctuating criminal tendencies, and how their tendencies do not necessarily

reflect their criminal benefits, we can now consider individuals who almost

never need to be deterred, because they find it morally wrong to commit

crimes. Such individuals have low tendencies to commit crime, but, even if

rarely, may ‘lapse’154 into committing crime.

D. Law Abiding Citizens, Fluctuating Criminal Tendencies, and Non-

deterrable Crimes

Consider Michael, a person who under normal circumstances cannot

even imagine murdering someone. As such, ordinarily he would not kill, even

if it were legal. But, if he ever finds his wife in bed with another man, he

would temporarily be overcome by the temptation of attacking that person (or

his wife155) regardless of the penalty associated with murder (or

manslaughter), and this attack may result in the death of that person. If,

however, Michael has sufficient ‘cooling time’,156 he would realize that

attacking either individual would be a mistake, and decide not to commit a

152 This problem is commonly called dynamic inconsistency and is theorized by making use of

hyperbolic discounting. See, e.g., Manuel A. Utset, Hyperbolic Criminals and Repeated Time-Inconsistent Misconduct, 44 HOUS. L. REV. 609 (2007). 153 This is a weaker assumption than the assumption that the harm from crime always exceeds

the benefit from crime, which has previously been invoked in economic analyses of law

enforcement. See, e.g., Louis Kaplow, The Optimal Probability and Magnitude of Fines for Acts that Definitely are Undesirable, 12 INT’L REV. L. & ECON. 3 (1992). 154 The term lapsing is used by Cooter, supra note 12, to refer to situations where individuals

commit crime. Professor Cooter defines lapses as the “rare occasions when [the potential offender]

draws preferences from the tail of the distribution where uncertain or future costs are discounted

very highly”, id. at 150. 155 See, supra note 139. 156 See, Kahan & Nussbaum, supra note 9, discussing the concept of cooling time and a number of

cases interpreting it.


42

crime. As such, when Michael acts under the influence of temporary and

emotional stimuli he acts against his best interest.

For purposes of sketching out Michael’s fluctuating criminal

tendencies, which may diverge from his benefits, it is sufficient to note that

Michael may temporarily be undeterrable in cases where he is under the

influence of emotional stimuli. Furthermore, even if very rarely, Michael gets

so angry at people that, but for the prospect of imprisonment, he would

consider killing them. In this case, the PDF representing Michael’s tendency

to commit crime can be represented by figure 4 below.157

As figure 4 demonstrates, intuitively there is little deterrence value to

punishing Michael, because (i) most of the time (i.e. in Zone 1) it is

unnecessary to punish Michael; he abstains from crime even if there is no

punishment, (ii) in the unlikely case when Michael has a desire to commit

157 For expositional purposes, figure 4 is drawn such that it assigns positive densities for values

smaller than ‘0 years’ as well as for values greater than ‘100 years’. The choice of ‘100’ years is

completely arbitrary. One may object to this exposition, suggesting that such values cannot exist

or are meaningless. The purpose here is to represent by Zone 1 the frequency with which Michael

has no desire to commit crime and by Zone 3 the frequency with which Michael is non-deterrable.

This exposition enables such representation in a comprehensible and compact manner. An

alternative way of representing the same idea would be to assign positive probabilities to points ‘0

years’ and ‘100 years’. But this would require the use of mixed distributions, which would be more

difficult to represent and explain. See, e.g., DeGroot et al., supra note 129, at 108 (explaining

mixed distributions). Furthermore, with some creativity, values smaller than ‘0 years’ could be

interpreted as cases corresponding to subsidized crimes (e.g. the government rewards rather than

punishing crime) and values greater than ‘100 years’ can be interpreted as being tortured at

varying degrees of severity while in jail.


43

crime, it is more likely than not that there is no punishment available that can

deter him (as in Zone 3). Furthermore, in the rare case when Michael has a

desire to commit crime and can be deterred from doing so (as in Zone 2),

relatively small expected punishments are usually sufficient for deterrence

purposes. As such, from a deterrence perspective if each individual in society

were like Michael, it would be desirable to either not punish the killing of

other people, or to impose relatively small punishments.

By making similar points, scholars have criticized L&E theories of

punishment;158 if most crimes are committed by people who are undeterrable,

how can we explain the fact that we punish them by using a L&E theory? I

answer this and related questions in the next section.

V. ECONOMIC ANALYSIS WITH FLUCTUATING CRIMINAL TENDENCIES

There are at least two inter-related potential reasons as to why, from a

consequentialist perspective, criminals ought to be punished, even if most

criminals are frequently non-deterrable. First, imprisoning non-deterrable

criminals incapacitates them, and prevents them from committing further

crime.159 Accordingly, if the harm160 associated with the crime prevented

through incapacitation exceeds the cost of imprisonment, punishing non-

deterrable criminals through imprisonment is justifiable on consequentialist

grounds. Second, even if some potential criminals are frequently non-

deterrable, punishment could still, even if infrequently, lead them to abstain

from committing crime,161 and deter other potential criminals, who are more

responsive to punishment. Therefore, if benefits associated with the

deterrence of such a minority exceeds the cost of punishing non-deterrable

criminals, then punishment would again be justifiable on consequentialist

grounds.

The first consequentialist (and incapacitation based) justification for

punishment exists only if the criminal being punished has a significant

158 See, supra note 3. 159 But see Ehrlich, supra note 19, at 315 (mentioning a caveat “although imprisonment

temporarily eliminates participation in criminal activity outside of prison walls, it does not stop it

inside”). 160 If criminal benefits are included in the social welfare calculus, then social harm equals the

harm to the victim minus the benefit to the criminal. 161 E.g., Michael, whose criminal tendencies are depicted in figure 4, supra, is deterred from

committing crime when his criminal tendencies fall in zone 2 in figure 4.


44

likelihood of committing crime in the future.162 If every individual was like

Michael,163 we would not expect to see a high frequency of recidivism, and

therefore benefits from incapacitation would be off-set by costs of

imprisonment. Similarly, we would not expect benefits associated with

deterrence to be high, because punishment rarely deters people like

Michael.164 As such, both justifications rely on there being at least some

individuals who do not have criminal tendencies similar to Michael’s.

Having established that the presence of individuals, who are different

than Michael, is a necessary condition for the proffered consequentialist

justifications for punishment in general, we must ask whether they are also

sufficient for providing rationales for the ‘puzzling’ practices in criminal law

discussed in section III. In the remaining parts of this section, I demonstrate

that if there are some individuals, who have high criminal tendencies165 and

are more responsive to punishment –along with people like Michael— then

many ‘puzzling’ doctrines and legal practices can be justified on

consequentialist grounds. I also demonstrate the key role that fluctuating

criminal tendencies play in these justifications.

Briefly stated, when there are ‘professional criminals’ (i.e. individuals

with fluctuating and high criminal tendencies), as well as ‘non-professional

criminals’ (i.e. individuals like Michael) existing practices in criminal law can

be interpreted as mechanisms which address the trade-off between

minimizing the unnecessary costs of punishing non-professional criminals and

maximizing the deterrence and incapacitation of professional criminals.

A. Punishing Repeat Offenders More Severely

When people possess constant criminal tendencies, as discussed in

Section III, it is hard to provide a consequentialist and satisfying justification

as to why repeat offenders should be punished more severely. When we

assume that people have fluctuating criminal tendencies, then punishing

162 See Shavell, supra note 17, (demonstrating that incapacitative benefits are increasing in the

offender’s dangerousness, i.e. his likelihood of recidivating). 163 See supra figure IV (summarizing Michael’s criminal tendencies). 164 This follows from the fact that zone 2, in figure 4, supra, occupies a very small area in

comparison to zones 1 and 3. 165 The existence of individuals with high criminal tendencies is supported by arrest data offered

by the Bureau of Justice Statistics. In particular, the data suggests that over 2/3’s of prisoners

released in 1994 were rearrested within three years after their release. See Patrick A. Langan and

David J. Levin, Recidivism of Prisoners Released in 1994, 15 FED. SENTENCING REP. 58 (2002).


45

repeat offenders more severely serves a consequentialist purpose related to its

information-exploiting feature.166

When a person is caught committing crime for the first time, it is not

clear whether he did it because he is a professional criminal, or because he is a

non-professional criminal who happened to have an unexpected impulse which

led him to lose control over his actions.167 If the first time offender committed

crime due to the latter explanation, then it makes little sense to punish him

severely. As explained earlier, non-professional criminals are unlikely to

recidivate, and severe sanctions are rarely necessary to or capable of deterring

them.168 As such, incapacitation and deterrence rationales for punishment do

not exist, or are very weak. If, on the other hand, the first time offender is a

professional criminal, then he should be punished severely, because

punishment results in significant incapacitation as well as deterrence benefits.

For purposes of sentencing, however, it is not possible to distinguish

between first time offenders who are professional and non-professional

criminals, because criminal tendencies are not directly observable.

Accordingly, it is necessary to punish both types uniformly. This creates a

simple trade-off: reducing costs of punishing non-professional criminals, and

increasing the deterrence and incapacitation of professional criminals. The

greater the proportion of non-professional offenders in society, the more

important it becomes to reduce the costs of punishing these offenders, and

vice-versa.169 This observation is key to explaining why, from a

consequentialist perspective, repeat offenders ought to be punished more

severely.

166 An interesting question to consider is to what extent the rationales provided in this subsection

extend to corporate crimes and liabilities. Since individuals who have control over corporations

change over time, updating Bayesian beliefs, as described in note 170, infra, concerning

corporations’ dangerousness may often be difficult or meaningless. In cases where such updating

is impossible the rationale for punishing offenders discussed in this section vanishes for

corporations, but not individuals. For a discussion of optimal punishment of corporations versus

individuals, see Douglas H. Ginsburg & Joshua D. Wright, Antitrust Sanctions, 6 COMPETITION

POL’Y INT’L 3 (2010); Jennifer Arlen, Corporate Criminal Liability: Theory and Evidence, in

RESEARCH HANDBOOK ON THE ECONOMICS OF CRIMINAL LAW (Alon Harel & Keith Hylton, eds.

2012, forthcoming). 167 This would correspond to the case where a person has criminal tendencies similar to those

depicted in figure 4, and due to some rare event he temporarily falls in zone 3 and is undeterrable. 168 They are unlikely to recidivate, because ex ante, their likelihood of falling in zones 2 and 3, as

in figure 4, supra, is very small. They are rarely deterred by severe sanctions, because zone 2, in

figure 4, supra, occupies a very small area in comparison to zones 1 and 3. 169 This observation may be capable of providing a novel explanation as to why penalties for

similar offenses are higher in the United States than in other countries. More generally, if the

proportion of non-professional criminals is decreasing with inequality, then we should see higher

sentences for similar offenses in countries with higher inequality. As such, this brief observation

may provide a starting point for future research projects.


46

Just as it is impossible to determine whether a first time offender is a

non-professional or a professional criminal, it is impossible to determine the

same for a repeat offender. The fact that a person is a repeat offender,

however, provides some valuable information for sentencing purposes: a

repeat offender is much less likely to be a non-professional criminal than a

professional criminal. This follows from a simple application of Bayesian

updating of beliefs.170 Given that a person has committed crime twice, it is

likely that this person has a PDF which assigns high benefits from crime, and

is a professional criminal. Due to these reasons, the proportion of repeat

offenders who are non-professional criminals should be much lower than the

proportion of first time offenders who are non-professional criminals.

As explained earlier, there is a trade-off between minimizing the costs

of punishing non-professional criminals, and deterring and incapacitating

professional criminals. This trade-off necessitates the imposition of severe

punishments to a group of criminals when it is known that the proportion of

professional criminals in that group is high. From the preceding discussion, it

follows that the proportion of professional criminals is much higher among

repeat offenders. This implies that repeat offenders should be punished more

severely than first time offenders.

It should be noted that this reasoning provides a rationale for the

common practice of tying criminal penalties to criminals’ prior records. The

Federal Sentencing Guidelines structure punishment schemes with increasing

sentences for those with prior criminal activity.171 Many states have ‘three

strikes’ laws, which require enhanced punishments for criminals with a record

of three or more serious offenses. These practices are justified from a

consequentialist perspective. Prior criminal records indicate a greater

170 Bayesian updating of beliefs occurs when the discovery of a piece of information affects the

estimated likelihood of an event taking place. The concept is closely related to the calculation of

conditional probabilities and Bayes’ Theorem. See, e.g., DeGroot et. al, supra note 129, at 49-79.

The likelihood that one believes a certain event will occur, prior to the discovery of new

information, is called the prior probability of that event happening. Similarly, the likelihood that

one believes a certain event will occur, after the discovery of new information, is called the

posterior probability of that event happening. The posterior probability that a repeat offender,

named Y, is a professional criminal (PC), can be calculated by using Bayes’ Theorem, see id. at 69:

( | )

( ) ( | )

( ) ( | ) ( ) ( | )

This expression, which makes use of the notation introduced in note 129, supra, is greater than

the prior probability of Y being a professional offender as long as professional criminals have

greater tendencies to commit crime. 171 See supra note 21.


47

likelihood that the criminal has high criminal tendencies, and has not

committed a crime due to some unexpected random event. This implies that

the criminal is both more dangerous and often deterrable, and therefore

should be punished severely.

Finally, it is worth mentioning that this justification cannot be derived

under theories which rely on or assume constant criminal benefits. In such

theories, a person’s criminal tendency is immediately revealed after he

commits a crime. As such, it is neither possible nor necessary to obtain further

information regarding the offender’s criminal tendencies. Therefore, the trade-

off identified in the preceding parts of this section, and accordingly the

rationale justifying more severe punishments for repeat offenders disappears.

B. Remorse and Apologies

In the previous sections, I explained how potential offenders’ criminal

tendencies may fluctuate, and how a PDF may be used to describe the

likelihood with which a potential offender commits crime. Although this

framework accounts for fluctuations in criminal tendencies over time, it still

generates a static framework. In other words, it assumes that a potential

offender has the same PDF over time. To study remorse, this assumption can

be replaced with a more realistic one under a dynamic setting. In particular,

an offender’s PDF may piecewise shift upon committing crime.172

Shifts in PDF’s are convenient and realistic ways to capture remorse.

A person, who feels truly sorry after committing a crime, presumably, and at

least partially, loses his willingness to commit crime and is likely to exert

more control over his actions in the future, and is therefore less likely to

commit crime in the future.173 As such, the change in a remorseful offenders’

criminal attitude can be captured by a shift in his PDF, as demonstrated in

figure 5 below.

172 See, e.g., Murat C. Mungan, A Note on the Effects of State-Dependent Benefits on Optimal Law Enforcement, 6 REV. L. & ECON. 97 (2010); Mungan, Apologies, supra note 24 (providing formal

models where remorseful offenders derive disutility, in the form of guilty conscience. These

models, unlike the model presented here, do not incorporate repeated interactions, and therefore

cannot capture the effects of such disutilities on future propensities to commit crime.) 173 See Mungan, supra note 172, at 98 (briefly reviewing the existing literature and concluding

that “In sum it has been documented that some individuals, if not all, feel a sense of guilt after

committing a crime …”, citing Jacob Adler, THE URGINGS OF CONSCIENCE: A THEORY OF

PUNISHMENT (1992); Michael S. Bernick, Of Crime and Conscience 68 A.B.A. J. 306 (1982);

Stephanos Bibas, Forgiveness in Criminal Procedure, 4 OHIO ST. J. CRIM. L. 329 (2007); Darren

Bush, Law and Economics of Restorative Justice: Why Restorative Justice Cannot and Should Not be Solely about Restoration UTAH L. REV. 439 (2003); Robert F. Cochran, Jr., Crime, Confession, and the Counselor-At-Law: Lessons from Dostoyevsky, 35 HOUS. L. REV. 327 (1998); John

Tasioulas, Repentance and the Liberal State 4 OHIO ST. J. CRIM. L. 487 (2007); Bruce J. Winick,

The Jurisprudence of Therapeutic Jurisprudence, 3 PSYCHOL., PUB. POL’Y, & L. 184 (1997).


48

Figure 5 demonstrates that a truly remorseful offender is less likely to

recidivate than non-remorseful offenders –whose fluctuating criminal

tendencies remain unchanged, and therefore can be represented with the

initial PDF, namely curve I. Accordingly, the incapacitative benefits of

punishing remorseful offenders are not as high as the corresponding benefits

arising through the punishment of non-remorseful offenders.174 This implies

that, if it were possible to separate truly remorseful offenders from those who

are not, it would be optimal to punish remorseful offenders less severely.175

Remorse does not only signal that an offender’s criminal tendencies

have been altered after committing a crime. It is plausible to assume that a

person, who has committed a crime due to some unexpected impulse, is more

likely to experience remorse than a professional offender.176 As such, the

proportion of professional offenders among non-remorseful offenders is higher

than the proportion of professional offenders among remorseful offenders.

Therefore, as explained in subsection V.A., supra, the expected incapacitative

and deterrent benefits of punishing remorseful offenders are lower than the

corresponding expected benefits of punishing non-remorseful offenders. This

implies that, if it were possible to separate truly remorseful offenders from

174 This follows from the fact that the area of the first zone lying under Curve I is smaller than

the corresponding area lying under Curve R. 175 This follows from the simple fact that punishment of remorseful offenders results in smaller

deterrent as well as incapacitative benefits, as implied by figure 5, supra. 176 I thank Mark Seidenfeld for making this point.


49

those who are not, it would be optimal to punish remorseful offenders less

severely.

It is impossible, however, to separate truly remorseful offenders from

those who are not.177 This impossibility, as I have demonstrated in a previous

article,178 may lead to substantial costs associated with penalty reductions for

those who convincingly display remorse.179 Incorporating the observation that

remorseful offenders are less likely to recidivate, and therefore that they

ideally ought to be punished less severely, generates a counter rationale as to

why it may be desirable to allow penalty reductions for seemingly sincere

apologies. As such, incorporating dynamic and fluctuating criminal tendencies

in economic analyses leads to a broader range of conditions under which

sentence reductions for those who convincingly display remorse is justified.

A second important implication of incorporating remorse through

dynamic fluctuating benefits is revealed when one makes the observation that

a repeat offender was most likely not remorseful after his first offense, since it

is unlikely for a remorseful offender to recidivate. Therefore, a repeat offender

is not likely to have experienced remorse after his initial crime, and it is

unlikely that a repeat offender has a shifted PDF180.

This observation provides an additional rationale as to why repeat

offenders ought to be punished severely. The proportion of first time offenders

who feel remorseful upon committing crime is expected to be much higher

than the corresponding proportion of repeat offenders. Therefore, expected

incapacitative benefits associated with punishing repeat offenders is much

higher than the incapacitative benefits of punishing first time offenders.

Hence, it is worth incurring greater punishment costs to imprison repeat

offenders for longer periods of time.

C. Voluntary Manslaughter

Existing law and economics literature is not very successful in

providing consequentialist justifications as to why heat of passion crimes

should be punished less severely.181 When one considers fluctuating criminal

benefits and the incapacitation function of punishment, consequentialist

177 See supra note 118 and accompanying text. 178 See Mungan, Apologies, supra note 24. 179 See supra note 119 and accompanying text. 180 Recall that the shifted PDF is the one represented by curve I in figure 5, supra. 181 But see subsection III.B.3., supra, where I summarize a powerful argument presented by

Posner, supra note 12. Note that this argument, too, relies on a variant of fluctuating criminal

tendencies. The next two paragraphs provide an abbreviated version of this argument. For a

slightly longer version, see subsection III.B.3., supra.


50

theories providing rationales for penalty reductions for voluntary

manslaughter can be strengthened significantly.

Recall Michael’s fluctuating criminal tendencies from section IV.

Voluntary manslaughter presumably occurs when Michael has criminal

tendencies falling under zone III in figure 4. For instance, if Michael finds his

wife with another man, he may temporarily be ignorant about the expected

punishment associated with attacking his wife182 or the person with whom she

is having an affair, therefore he is undeterrable.

Since Michael is undeterrable under these circumstances, it makes

little sense, from a deterrence based L&E perspective, to punish him for his

crime.183 In fact, if we were certain that every person killing his/her

adulterous spouse was undeterrable at the time he/she committed the crime –

again from a simple deterrence based perspective— it would be optimal to not

punish any person for such crimes.

It is certainly much more realistic to assume that at least a proportion

of people respond to incentives, even when confronted with the unfortunate

circumstance just described.184 In fact, it may be required to increase, rather

than reduce, the sanction for voluntary manslaughter to deter people who

respond to incentives but place a very high value on inflicting pain on

adulterous people.185

This being the case, it is a priori and theoretically ambiguous from a

deterrence based perspective, whether penalty reductions for voluntary

manslaughter are justified, even when one accounts for fluctuating criminal

tendencies. The question ultimately becomes an empirical one: are the

imprisonment cost savings from penalty reductions for voluntary

manslaughter off-set by the same reductions’ deterrence lowering effect? To

the extent that we believe the answer to this question is ‘no’, we have a

consequentialist justification for penalty reductions for voluntary

manslaughter in a purely deterrence based framework.

Assuming, however, that we answer the question posited above

positively, a second consideration must be taken into account, namely the

182 See supra note 139. 183 One may argue that punishing him may result in benefits to the victim’s family, relatives and

friends. Although this argument is somewhat convincing, it is certainly incomplete. Not punishing

the offender results in similar benefits to the offender’s family, relatives, and friends. 184 See Kahan & Nussbaum, supra note 9, at 310 (making the same observation: “.. the common

law paradigms of "adequate provocation"-adultery and humiliating but non-life-threatening blows

to the face- occur frequently without leading to deadly retaliation”) 185 See supra notes 126 and 127, and accompanying text.


51

incapacitation function of imprisonment. The limited L&E research on

incapacitation suggests that the benefit of incapacitation increases with the

imprisoned offender’s dangerousness.186 Therefore, if the expected

dangerousness of a murderer is higher than the expected dangerousness of a

person who has committed voluntary manslaughter, a second rationale

emerges as to why voluntary manslaughter ought to be punished less severely.

Next, I argue that this condition is likely to hold.

It is reasonable to assume that individuals like Michael are more

likely to commit voluntary manslaughter than murder.187 As such, the

proportion of individuals who are likely to recidivate among murderers is

higher than the corresponding proportion of individuals who have committed

voluntary manslaughter.188 Therefore, the expected dangerousness of a

murderer is higher than the expected dangerousness of a person who has

committed voluntary manslaughter.

This observation supplies a second, and consequentialist, reason as to

why penalty reductions for voluntary manslaughter make sense. Finally, for

the sake of completeness, I will briefly propose a third, and independent

rationale as to why voluntary manslaughter ought to be punished less

severely, although this rationale is unrelated to the two simple observations189

which constitute the focus of this Article.

In general, precautions taken by victims to avoid harm are socially

wasteful.190 In the case of voluntary manslaughter, to the contrary, they can

186 See supra notes 64 and 65, and accompanying text. 187 This follows from the assumption that circumstances pushing Michael’s criminal tendencies to

zones 2 and 3 in figure 4, supra, are more likely to be products of extreme emotional stimuli.

Therefore, a killing committed by Michael is more likely to constitute voluntary manslaughter

than murder. 188 This reasoning implicitly makes a number of harmless suppositions. The most important one is

that the number of ‘dangerous’ people being convicted for murder is at least as great as the

number of people being convicted for voluntary manslaughter. The second one is that people like

Michael are unlikely to recidivate, which follows from the fact that zones 2 and 3 in figure 4,

supra, occupy small areas. Furthermore, to the extent that people like Michael are likely to

experience remorse, their probability of becoming recidivists falls even further. 189 These are the facts that (i) people exert varying degrees of control over their actions over time,

and (ii) that imprisonment has an incapacitation effect. 190 A common example is the installation of an alarm system to protect one’s house from theft. For

related literature on costly precautionary activity by potential victims, see Steven Shavell,

Individual Precautions to Prevent Theft: Private Versus Socially Optimal Behavior, 11 INT’L REV.

L. & ECON. 123-132 (1991) (“Individuals act in a variety of ways to protect their property against

theft: they lock their doors, purchase alarm systems, hire guards, and so forth. The things that

individuals do on their own to reduce theft are of substantial importance. It is notable that private

expenditures on security from crime exceed public expenditures.” (citing William C. Cunningham

& Todd H. Taylor, The Growing Role of Private Security, NAT’L INSTITUTES JUS., RES. IN BRIEF,

1984, for the proposition that “private expenditures on security from crime exceed public

expenditures”)); Gordon Tullock, The Welfare Costs of Tariffs, Monopolies, and Theft, 5 W. ECON.


52

be socially beneficial. In the context of voluntary manslaughter, the

precautionary activity on the victims’ side would correspond to not provoking

the potential offender. To the extent that such provocation is socially costly,191

its prevention is socially beneficial.192 Therefore, ceteris paribus, the existence

of such social benefits provides a third consequentialist rationale for punishing

voluntary manslaughter less severely.

D. The Role of Fluctuating Criminal Tendencies and Incapacitation

The rationales provided for the three selected criminal law practices in

this section share a commonality. They exploit information revealed through

various aspects of the crime or characteristics of the criminal. By using such

information, one can use a Bayesian belief updating process193 to re-evaluate

the likelihood that the criminal is dangerous. Since incapacitative benefits are

greater for more dangerous offenders, the more likely that the criminal is

dangerous, the longer he ought to be imprisoned.

Fluctuating criminal tendencies play a key role in this reasoning. It is

only because criminal tendencies are fluctuating that one cannot conclude

from the mere fact that an offender committed a crime that he is sufficiently

dangerous. It is only due to such uncertainty created by the existence of

fluctuating criminal tendencies that one must be hesitant to impose harsh

punishments on individuals, and question whether the offender will repeat his

wrongs in the future.

VI. SUMMARY & CONCLUSION

Economic analyses of criminal law are criticized for invoking

unrealistic assumptions and performing poorly in providing rationales for a

J. 224, 231 (1967) (“The total social cost of theft is the sum of the efforts invested in the activity of

theft, private protection against theft, and the public investment in police protection.”); Keith N.

Hylton, Optimal Law Enforcement and Victim Precaution, 27 RAND J. ECON. 197 (1996)

(extending the analysis of costly precautionary activity by potential victims). Other secondary or

indirect effects of criminal law rules and standards on parties other than potential criminals are

explored in the existing literature to some extent. See, e.g., Alon Harel, Efficiency and Fairness in Criminal Law: The Case for a Criminal Principle of Comparative Fault, 82 CAL. L. REV. 1181

(1994); Mungan, supra note 54. 191 Provocation may, for instance, involve insulting the potential offender, causing him distress. 192 Harel raises a similar point, supra note 190, at 1215-1216. This observation presents an

alternative explanation to Kahan and Nussbaum’s proffered explanation as to why the common

law categorizes provocation the way it does. See, Kahan & Nussbaum, supra note 10, at 312

(“From the common law provocation categories, for example, it can be inferred that the law does

not attach as much value to the life of the paramour as it does to the life of the average person,

and for that reason it invests less in punishing emotions that promote killings of the former.”) 193 See, supra note 170.


53

number of criminal law doctrines. These criticisms may lead legal scholars to

be skeptical about the usefulness of conclusions drawn from economic analyses

of criminal law. In this Article, I demonstrate that the poor performance of

economic analyses in providing rationales for various criminal law doctrines is

not the result of some inherent flaw in its methodology, but its over-

simplifying assumptions.

Existing normative economic analyses apply consequentialism

narrowly by focusing on deterrence as the single justification for punishment,

and by implicitly or explicitly assuming that potential offenders’ tendency to

commit crime remains constant over time. By relaxing these two assumptions,

and replacing them with simple, yet more realistic alternatives, economic

analyses can perform much better in providing rationales for existing criminal

law practices. In particular, one can replace the assumption of constant

criminal tendencies with fluctuating criminal tendencies, and incorporate the

fact that the incapacitation function of imprisonment contributes to reductions

in crime. As pointed out in this Article, these replacements can be made by

employing existing tools in modern economics. More importantly, an economic

model that makes these simple adjustments can provide strong rationales for

pervasive criminal law practices.

These rationales focus on a Bayesian type information updating

mechanism. When fluctuating criminal tendencies are considered, the mere

fact that a person has committed a crime reveals imperfect information about

his dangerousness. Therefore, circumstances surrounding the crime reveal

important pieces of information that can be used to update beliefs concerning

an offender’s dangerousness. Since incapacitative benefits are greater for more

dangerous offenders, the stronger we believe –based on circumstances

surrounding the crime—that the criminal is dangerous, the longer we are

willing to imprison him.

By relying on these rationales, this Article demonstrates that the poor

performance of economic analyses in providing explanations for a number of

criminal law practices is something that can be remedied by focusing on a

broader application of consequentialist theories of punishment. Although this

Article focuses on three selected issues in criminal law –repeat offender laws,

voluntary manslaughter laws, and punishment of remorseful offenders—, the

model proposed appears to be capable of explaining the social desirability of

other pervasive principles and doctrines in criminal.

Consider, for instance, the mens rea requirement in criminal law. This

Article provides a framework to conceptualize this requirement as an


54

information exploiting device. A criminal’s mental state while committing a

harmful act reveals information about his likelihood of recidivating. Applying

the insights identified in this Article suggests that criminals should be

punished in proportion to the intentionality of their acts. I have not, however,

provided a complete model to integrate the mens rea requirement into

economic analyses of criminal law. This appears to be an interesting and

promising project for future research.

Documents

THE LAW AND ECONOMICS OF FLUCTUATING CRIMINAL TENDENCIES AND · Economic analyses of criminal law are frequently and heavily criticized for being unable to explain many criminal law